Euro Hovers Near Multi-Month Low Ahead of ECB Decision

The euro fell below $1.115, hovering near its lowest level since April 2025, as investors awaited the European Central Bank’s policy decision and key eurozone inflation and GDP data due later this week. Sentiment remained subdued amid France’s deteriorating fiscal outlook and mounting bond-market concerns. The ECB is widely expected to keep interest rates unchanged amid signs of slowing economic growth, leaving markets focused on its forward guidance. Friday’s GDP figures are expected to point to weaker eurozone growth, reflecting headwinds from summer heatwaves, low water levels in major waterways and rising global bond yields. Meanwhile, inflation trends remain mixed, with a German fuel-tax rebate and easing Spanish inflation expected to moderate price pressures. In the US, the Federal Reserve is also expected to hold rates steady this week. Markets are currently pricing in potential rate hikes from both central banks in December.

The euro traded little changed at around $1.12, hovering near multi-month lows as investors awaited the European Central Bank’s policy decision and a series of key inflation and GDP releases across the region, while France’s worsening fiscal outlook and bond-market pressures continued to weigh on sentiment. The ECB is widely expected to keep interest rates unchanged this week amid signs of slowing economic momentum, leaving investors focused on its forward guidance. GDP data due Friday are expected to show weaker eurozone growth, reflecting headwinds including summer heat waves, low water levels in major waterways and a surge in global bond yields. Meanwhile, the inflation picture remains mixed, with a German fuel-tax rebate and easing Spanish inflation expected to temper price pressures. Across the Atlantic, the US Federal Reserve is also widely expected to leave rates unchanged this week. Markets are currently pricing in rate hikes from both central banks only in December.

The euro dropped to $1.12, remaining close to multi-month lows following the release of weaker-than-expected PMI data, while concerns over social unrest and rising public debt across Europe continued to weigh on the currency. Flash data showed eurozone private-sector growth slowed in October to a four-month low, pressured by rising energy costs, higher interest rates and renewed contraction in France amid political and fiscal uncertainty. Consumer confidence also deteriorated more sharply than expected. Meanwhile, investors remain concerned about rising borrowing costs across Europe, particularly in France, where 10-year government bond yields reached fresh 24-year highs and the risk premium climbed to levels last seen during the 2011 eurozone sovereign debt crisis. Looking ahead, further demonstrations are expected across the region this weekend, while investors await next week’s inflation data and the ECB’s policy meeting, where rates are widely expected to remain unchanged.