Euro Hits Four-Year High

2025-09-16 10:01 By Joana Ferreira 1 min. read

The euro climbed above $1.18 for the first time since July, hovering at its highest level since September 2021, supported by stronger-than-expected investor sentiment in both the Eurozone and Germany, alongside broad dollar weakness as the US Fed prepares to resume interest rate cuts this week.

Markets broadly expect the Fed to lower rates by at least 25 bps as policymakers weigh a cooling labor market against lingering inflationary pressures from tariffs.

In contrast, European officials continue to emphasize caution on inflation.

ECB Executive Board member Isabel Schnabel urged policymakers to “keep a steady hand,” warning that risks ranging from tariffs and services inflation to food prices and fiscal policy remain significant.

Slovak central-bank Governor Peter Kazimir echoed that view, cautioning that ignoring these risks “would be a mistake.” The ECB last week kept borrowing costs unchanged for a second consecutive meeting, signaling that its rate-cutting cycle may have ended.



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