Euro Hits 5-week Low

EURUSD decreased to 1.17, the lowest since January 2026. Over the past 4 weeks, Euro US Dollar lost 0.6%, and in the last 12 months, it increased 12.02%.

The euro fell toward $1.17 on Monday, hitting multi-week lows as the dollar strengthened on safe-haven demand following a sharp escalation in the Middle East conflict. The US and Israel carried out strikes on Iran over the weekend, resulting in the death of Iran’s Supreme Leader and the effective closure of the Strait of Hormuz. The common currency also faced pressure from surging energy prices, with Europe poised to secure significant natural gas supplies just as prices spike higher. Meanwhile, data on Friday showed inflation in Germany came in below forecasts in February, while price growth accelerated in France and Spain. Money markets currently assign only about a 30% probability to a rate cut by the ECB by December. On Thursday, ECB President Christine Lagarde said headline inflation is expected to converge toward the 2% target over the medium term, with food inflation, crucial to consumer perception, projected to remain slightly above 2% later this year.

The euro held near $1.18 as investors digested fresh inflation data and its implications for European Central Bank policy. Germany’s EU-harmonized inflation rate eased to 2.0% in February, slightly below the 2.1% consensus and effectively in line with the ECB’s target. In contrast, France’s HICP accelerated to 1.1% from 0.4% in January, surpassing the 0.7% forecast, while Spain’s HICP rose to 2.5%, above both January’s 2.4% reading and market expectations of 2.3%. Money markets currently assign just a 30% probability to an ECB rate cut by December. Speaking to the European Parliament on Thursday, ECB President Christine Lagarde said headline inflation is expected to converge toward the 2% target over the medium term, with food inflation, key to consumer perception, projected slightly above 2% later this year. She added that the ECB will monitor currency movements but does not plan direct intervention in foreign exchange markets.