Euro Slides to 17-Month Low Amid Energy Costs, Inflation Fears

The euro hit its lowest point in 17 months on October 1, as investors battered European assets due to higher oil prices and inflation. It fell below US$1.13 for the first time since May 2025 against the US dollar.

The euro also sank against the yen and the Swiss franc, barely holding in positive territory against the pound. Yields on French debt surged to a 14-year high due to concerns about France's shaky finances. Benchmark German debt came under fire as well.

Data showed that US inflation rose less than expected in August, but eurozone inflation continued to pose a threat to the global economy. Jane Foley, head of FX strategy at Rabobank, attributed the euro's struggles to its position as an energy importer and concerns about European politics.