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Euro Reaches 17-Month Low Against Dollar
Confirmed
In Short: The euro has reached a 17-month low against the US dollar, according to market-implied pricing, with the exchange rate forecast to be at 1.1257 in one month.
Investment banks and market pricing indicate that the live EUR/USD rate is currently at 1.1256, up 0.1100% from the open.
The August Producer Price Index (PPI) report in the US reaffirmed expectations for further Federal Reserve rate hikes, boosting the US dollar and weighing on the euro.
The US Dollar Index (DXY) has reached a fresh year-to-date high, trading around 102.20 after touching 102.53 earlier in the day.
The euro's decline is partly due to concerns over France's public finances and political uncertainty in Spain, prompting calls for the European Central Bank (ECB) to take action.
Deutsche Bank's Jim Reid noted that the spread between German and French bonds had widened significantly, raising fears of a potential euro sovereign crisis.
The latest sell-off in the euro has been exacerbated by elevated US Treasury yields and mixed US business activity data, which have supported the US dollar.
The US dollar's strength is also impacting other currencies, such as the Iranian rial, which hit an all-time high against the dollar, reaching 2.542 million rials.
The Russian ruble has also weakened against the dollar, with oil prices fluctuating around $90 per barrel.
Against this backdrop, the US dollar may struggle to extend its recent gains, although expectations of further Fed tightening could limit the downside in the near term.
The euro's weakness could reinforce inflationary pressures, with inflation expected to remain high into 2027.
The ECB would need to carefully manage any potential crisis, given the risks to the eurozone.
Investors are closely watching the EUR/USD rate, with many subscribing to alerts for when the exchange rate reaches their target.
What's confirmed
- In one month the Euro-US Dollar exchange rate is forecast to be at 1.1257, according to market-implied pricing.
- The euro to us dollar forecast from investment banks and market pricing, with the live EUR/USD rate, charts and daily analysis Data Forecast Live Rate 1 EUR = 1.1256 USD ▲ +0.1100% High 1.1285 Low 1.1221 Open 1.1243 Prev.
- We'll email you when the Euro to US Dollar rate reaches your target.
What's still developing
- The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair.
- The dollar was quoted at 2.542 million rials, up 3.84% from the previous day, according to Pashizi, a website tracking Iran’s free foreign exchange market.
- [Fatemeh Bahrami – Anadolu Agency] Iran’s rial fell to a fresh record low against the US dollar on Tuesday, with the free-market rate crossing 2.5 million rials per dollar, Anadolu reports.
- The Russian ruble got marked down VS the dollar since the price of Oil is wandering these days back and forth around $90... and the Euro Wannabes are signaling that we should get ready for a long period of dollar strength.
- The table below shows the percentage change of US Dollar (USD) against listed major currencies today.
- Elevated US Treasury yields also support the US Dollar, even as traders scale back expectations of another Federal Reserve (Fed) interest-rate hike this month following last week’s weaker-than-expected US employment report.
- The euro has been sliding against the dollar for much of 2026, down around 5% since the start of the year.
- However, he said the latest sell-off was prompted in particular by concerns over France, where "investors positioned for higher fiscal risk."
- The resulting pressure on the euro and on other government bond markets, including Italy's, means there are calls for the European Central Bank (ECB) to take action to prevent concern over France turning into panic.
- Deutsche Bank's Jim Reid said in a note on Monday that at one point last week, the spread between German and French bonds had become so wide that a "mini-panic" was at hand.
- "The big question is whether this is the start of a new euro sovereign crisis or whether markets have already overshot," he said.
- "Comparisons to 2012 are well off the mark," he said.