Euro Slips to Fresh 15-Month Lows

2026-10-01 06:43 By Joana Ferreira 1 min. read

The euro weakened below $1.13, its lowest level since May 2025, after falling more than 2% against the dollar in September, its sharpest monthly decline in 14 months.

Markets expect the ECB to tighten more slowly than the Fed, with further ECB hikes priced in over the coming year and the next move potentially in December alongside updated economic projections.

Meanwhile, inflation accelerated across several major European economies in September, driven largely by fuel prices.

ECB member Isabel Schnabel said Wednesday that the coming months will help assess the energy shock and determine how high to take rates, suggesting the central bank’s most hawkish policymaker is taking a wait-and-see approach as the US-Iran war enters its eighth month.

A subdued growth outlook could further constrain the ECB’s room for aggressive tightening.

In France, the government unveiled a plan to cut the budget deficit, although the fiscal watchdog warned that its economic assumptions were “optimistic.



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