Euro Slips From Three-Month Highs

2026-08-27 10:10 By Joana Ferreira 1 min. read

The euro edged below $1.165, retreating from the near three-month highs reached last week, as investors assessed the pause in the recent oil price decline and the outlook for ECB interest rates.

Attention is also turning to Federal Reserve Chair Kevin Warsh's speech on Friday at the annual Jackson Hole gathering for further clues on the Fed's policy path.

Meanwhile, prospects for an agreement to reopen the Strait of Hormuz remain uncertain amid conflicting signals from Iran.

Qatar's prime minister is due to visit Tehran on Thursday to revive US-Iran diplomacy, with the two sides still divided over control of the key waterway.

In money markets, traders are pricing about 40 bps of additional ECB tightening by year-end, with a September rate hike almost fully priced in.

ECB policymakers said they are prepared to raise rates at their September meeting to contain the economic fallout from the Iran war, although they remain reluctant to signal further tightening beyond that.



News Stream
Euro Slips From Three-Month Highs
The euro edged below $1.165, retreating from the near three-month highs reached last week, as investors assessed the pause in the recent oil price decline and the outlook for ECB interest rates. Attention is also turning to Federal Reserve Chair Kevin Warsh's speech on Friday at the annual Jackson Hole gathering for further clues on the Fed's policy path. Meanwhile, prospects for an agreement to reopen the Strait of Hormuz remain uncertain amid conflicting signals from Iran. Qatar's prime minister is due to visit Tehran on Thursday to revive US-Iran diplomacy, with the two sides still divided over control of the key waterway. In money markets, traders are pricing about 40 bps of additional ECB tightening by year-end, with a September rate hike almost fully priced in. ECB policymakers said they are prepared to raise rates at their September meeting to contain the economic fallout from the Iran war, although they remain reluctant to signal further tightening beyond that.
2026-08-27
Euro Holds Near Mid-May High as Traders Assess ECB Rate Outlook
The euro traded around $1.165, near its highest level since mid-May, as investors assessed falling oil prices and the outlook for European Central Bank interest rates. Iran said it had resumed talks with Oman on managing the Strait of Hormuz, boosting hopes that the key waterway could reopen and ease disruptions to energy shipments. Meanwhile, Reuters reported that ECB policymakers are prepared to raise rates at their September meeting to contain the economic fallout from the Iran war, but are reluctant to signal further tightening thereafter. Separately, ECB board member Isabel Schnabel said rates may need to rise further if the Middle East conflict persists, citing upside risks to inflation from the resilient euro-area economy. Money markets are pricing less than 40 bps of additional ECB tightening by year-end, with a September rate hike nearly fully priced in.
2026-08-26
Euro Remains Close to Three-Month Highs
The euro held just above $1.165 in the final full week of August, sustaining its highest level since mid-May, as investors braced for a more hawkish European Central Bank amid geopolitical tensions complicating its inflation battle. The ECB is widely expected to raise interest rates in September, following its June tightening to curb inflation pressures triggered by the US-Iran conflict and its impact on energy prices. Oil remains elevated, with risks of further supply constraints for refined fuels, low Eurozone gas inventories, and a prolonged conflict that could extend beyond the US midterm elections in November. These risks have fueled expectations of further ECB rate hikes. Money markets are now pricing in more than 40 basis points of additional ECB tightening this year, with the first hike fully priced as early as next month. Meanwhile, data on Tuesday showed German GDP grew 0.3% in Q2 2026, up from the preliminary 0.2% estimate.
2026-08-25