Trending
eurusd
Source: Newsmaker.id
The euro traded around US$1.12 on Thursday (October 15), attempting to recover from lows reached earlier in the month. This gain was primarily driven by a weakening US dollar, though the euro remains near its lowest level since May 2025, weighed down by expectations that the Federal Reserve may maintain a tight monetary policy to curb persistent inflation.
Within the Eurozone, the currency faces pressure from political and fiscal uncertainty, particularly in France. European Central Bank (ECB) President Christine Lagarde emphasized that France must address its debt issues through fiscal consolidation—a stance that dampened speculation that the ECB might purchase French bonds to contain rising yields. Lagarde also noted that inflation, fueled by surging energy prices, has not yet spread broadly across the Eurozone economy.
Nevertheless, the possibility of an ECB interest rate hike continues to support the euro. ECB Governing Council member Šimkus indicated that a rate hike remains an option this month if necessary, while the market continues to anticipate an ECB rate increase in December. Consequently, the euro’s future trajectory will be heavily influenced by developments in inflation, energy prices, fiscal conditions in Europe, and the divergence in monetary policy between the ECB and the Federal Reserve.
Newsmaker Analysis: The euro has room to extend its rebound should the US dollar continue to weaken; however, fundamental pressures remain significant. High interest rate expectations for the Fed and fiscal challenges in France act as headwinds, while the potential for an ECB rate hike serves as a potential support. In the short term, the EUR/USD pair is likely to remain sensitive to inflation data and shifts in policy expectations from both central banks.
Source: Newsmaker.id