Euro Falls to Two-Month Lows Amid Energy Price Surge and German Political Uncertainty

The euro is facing significant pressure as it trades near its lowest levels of the year against the dollar, down about 2% in September to around $1.137.

This decline has been compounded by a stronger dollar following a U.S. rate increase, which reinforced expectations that the Federal Reserve will maintain a firm stance on inflation.

Renewed increases in energy prices and political uncertainty are also weighing on the euro zone's economic outlook.

Germany and France are emerging as key sources of political uncertainty for investors, with Chancellor Friedrich Merz facing pressure after strong gains by the far right in recent state elections.