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Source: Newsmaker.id
The EUR/USD pair traded within a narrow range around 1.1200 on Monday (Oct 12), remaining close to lows not seen since May 2025. The Euro continues to face pressure amid mounting concerns over France's fiscal health and the potential for contagion to other high-debt Eurozone nations. Meanwhile, the US Dollar remains supported by safe-haven sentiment and expectations of a relatively hawkish Federal Reserve policy.
France's debt crisis is a primary factor capping the Euro's gains. Worries regarding the French government's ability to control its deficit and debt burden have intensified pressure on the country's bond markets. Should the situation deteriorate further, investors may reduce their exposure to Euro-denominated assets in favor of perceived safe havens, including the US Dollar.
On the US front, while expectations for a Federal Reserve rate hike in October have waned, the market still prices in a potential 25-basis-point increase in December. Concurrently, tensions in the Middle East are bolstering demand for the Dollar as a safe-haven asset. Recent escalations—including a Houthi attack on King Khalid International Airport in Riyadh—have heightened the risk of regional conflict and increased market uncertainty.
Newsmaker observes that the EUR/USD trajectory this week will be heavily influenced by a combination of European fiscal risks, Middle East geopolitics, and US inflation data. Wednesday’s CPI and Thursday’s PPI figures will serve as key catalysts; higher-than-expected inflation could revive expectations for Fed rate hikes, thereby boosting yields and the Dollar. Conversely, lower figures could provide the Euro with room to rebound from its prolonged period of pressure.
Source: Newsmaker.id