Euro Plunges to 17-Month Low Amid Inflation Concerns

The euro fell to its lowest point in 17 months on Thursday due to concerns over inflation and higher oil prices, which have negatively impacted European assets. The currency dropped below $1.13 against the US dollar for the first time since May 2025 as investors continue to favor the dollar amid rising Treasury yields.

European stocks fell by 0.66% along with bond prices, further weakening the euro's position. The dollar has experienced its sixth consecutive quarter of gains against a basket of currencies, its longest such streak since 2022 when US interest rates were increasing more rapidly than those in other regions.

Rabobank's head of FX strategy, Jane Foley, attributed the euro's decline to its 'growth risk,' which has been weighing on the currency despite the European Central Bank's decision to hike interest rates early on. Foley noted that positions were heavily long and concerns over Europe's status as an energy importer have also contributed to the euro's struggles.