Euro slides to 17-month low, hit by rates and inflation cocktail
TLT•The euro fell below $1.13 for the first time since May 2025, reaching a 17-month low as higher oil prices, inflation and political uncertainty weighed on European assets. The dollar recorded its sixth straight quarterly gain against a basket of currencies, its longest streak since 2022.
1. Euro under pressure
The euro fell 0.3% to $1.1299 and dropped nearly 2.5% in September, its largest monthly decline since July 2025. It also weakened against the yen and Swiss franc as French debt yields reached another 14-year high and German debt came under pressure.
2. Dollar gains persist
The dollar index rose 0.2%, near its highest level since mid-May, after logging six consecutive quarters of gains against a currency basket. Higher Treasury yields have supported the dollar, while global bonds recorded their largest monthly decline in years in September as government finances deteriorated, issuance increased and inflation rose. The Australian dollar fell to a two-month low after domestic inflation came in slightly below forecasts.
