Euro Weakens to 2025 Lows
The euro extended its decline, sliding towards the $1.11 level and touching its weakest point since March 2025, as the dollar remained supported by growing expectations of further Federal Reserve tightening in December. Meanwhile, the recent decline in oil prices lost momentum, with Brent crude stabilizing following shipping attacks in the Strait of Hormuz. Markets continued to digest hotter-than-expected US inflation data, which strengthened expectations of another Fed rate increase next month and raised the prospect of a more aggressive 50bp hike. In Europe, persistent political and fiscal uncertainty in France, coupled with concerns over a weakening growth outlook and speculation surrounding the succession to the ECB presidency, further weighed on sentiment. On the policy front, ECB Chief Economist Philip Lane suggested that another rate increase in December could be warranted, adding to the growing number of policymakers expressing support for a third rate hike this year.
The euro extended its decline, sliding towards the $1.11 level and touching its weakest point since March 2025, as the dollar remained supported by growing expectations of further Federal Reserve tightening in December. Meanwhile, the recent decline in oil prices lost momentum, with Brent crude stabilizing following shipping attacks in the Strait of Hormuz. Markets continued to digest hotter-than-expected US inflation data, which strengthened expectations of another Fed rate increase next month and raised the prospect of a more aggressive 50bp hike.
In Europe, persistent political and fiscal uncertainty in France, coupled with concerns over a weakening growth outlook and speculation surrounding the succession to the ECB presidency, further weighed on sentiment. On the policy front, ECB Chief Economist Philip Lane suggested that another rate increase in December could be warranted, adding to the growing number of policymakers expressing support for a third rate hike this year.