Euro Holds Near $1.16 Ahead of ECB Rate Hike

2026-09-08 07:19 By Joana Ferreira 1 min. read

The euro stabilized around $1.16 as investors looked ahead to the European Central Bank’s policy meeting later this week, while rising oil prices added to inflation concerns.

Brent crude approached $100 a barrel, while European natural gas prices rose to their highest level since late 2022 amid renewed tensions in the Middle East and reports that Iran and Oman were close to an agreement on managing shipping through the Strait of Hormuz, heightening concerns over Tehran’s growing influence over the key waterway.

Persistent inflation pressures and resilient economic growth are keeping central banks under pressure to maintain a restrictive policy stance.

The ECB is widely expected to raise interest rates on Thursday, with markets almost fully pricing in another hike by year-end.

In the US, investors are awaiting key inflation data later this week, after Friday’s strong jobs report lifted the probability of a Fed rate hike next week to nearly 60%, providing further support for the dollar.



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Euro Holds Near $1.16 Ahead of ECB Rate Hike
The euro stabilized around $1.16 as investors looked ahead to the European Central Bank’s policy meeting later this week, while rising oil prices added to inflation concerns. Brent crude approached $100 a barrel, while European natural gas prices rose to their highest level since late 2022 amid renewed tensions in the Middle East and reports that Iran and Oman were close to an agreement on managing shipping through the Strait of Hormuz, heightening concerns over Tehran’s growing influence over the key waterway. Persistent inflation pressures and resilient economic growth are keeping central banks under pressure to maintain a restrictive policy stance. The ECB is widely expected to raise interest rates on Thursday, with markets almost fully pricing in another hike by year-end. In the US, investors are awaiting key inflation data later this week, after Friday’s strong jobs report lifted the probability of a Fed rate hike next week to nearly 60%, providing further support for the dollar.
2026-09-08
Euro Steady as AfD Victory and ECB Hike in Focus
The euro was little changed just above $1.16 as investors digested the far-right AfD’s victory in Saxony-Anhalt and looked ahead to the European Central Bank’s policy meeting later this week, with higher oil prices adding to inflation concerns. The AfD won 44% of the vote, falling short of an overall majority but delivering a major blow to Chancellor Friedrich Merz’s conservatives. Meanwhile, Brent crude moved closer to seven-week highs after the US struck three Iranian oil tankers over the weekend, destroying one, while Tehran threatened to establish a new restricted zone outside the Strait of Hormuz. The ECB is expected to raise interest rates on Thursday, erring on the side of caution as the US-Iran war drags on, keeping oil prices elevated and reviving inflationary pressures. Traders are also pricing in roughly a 90% probability of a second rate hike by the end of the year.
2026-09-07
Euro Slips Below $1.16 as Strong US Jobs Data Lifts Dollar
The euro weakened back below $1.16 as stronger-than-expected US employment data boosted the dollar and reinforced expectations for tighter Federal Reserve policy. US nonfarm payrolls increased by 162,000 in August, significantly surpassing market expectations for a 56,000 gain and prompting markets to price in a near 60% probability of a Fed rate hike this month. Attention is now gradually shifting toward the European Central Bank’s September 10 policy meeting. Money markets continue to fully price in a 25-basis-point ECB rate hike to 2.5% next week, while assigning an almost 100% probability that the deposit rate will reach 3% by June 2027. Such pricing implies two additional rate increases by mid-2027. On the economic data front, Germany’s factory orders rose 2.5% in July, slowing from an upwardly revised 3.7% increase in June but comfortably exceeding market expectations for a 0.3% gain.
2026-09-04