Euro Plunges to 17-Month Low Amid Rising Oil Prices and Inflation

The euro plummeted to its lowest point in over 17 months against the US dollar as investors favored the stronger currency amidst rising oil prices and inflation. The European Central Bank's (ECB) interest rate hike has failed to boost the euro, which fell below $1.13 for the first time since May 2025.

The US dollar gained strength across various currencies due to its longest six-quarter winning streak against a basket of currencies, dating back to 2022 when US interest rates rose more quickly than elsewhere. European stocks and bond prices plummeted, further weighing on the euro.

Jane Foley, head of FX strategy at Rabobank, attributed the euro's decline to its 'bogged down' position due to Europe being an energy importer and concerns about French finances. The dollar index reached its highest level since mid-May, with yields continuing to rise for now supporting the currency.