Euro Slips Below 1.13 Amid Accelerating Inflation and European Economic Woes

The US dollar has reached an 18-month high due to strong macroeconomic data and rising interest rates. The revision of second-quarter GDP data from 1.6% to 2.2% demonstrates that the US economy is growing faster than the European economy.

Meanwhile, the euro has slipped out of its consolidation range and fallen below 1.13, the lowest level since May 2025. This is due to accelerating inflation and a deteriorating trade balance in Europe.

Rising political risks in France are tying the ECB's hands, making it difficult for them to raise interest rates. A slowdown in the eurozone's second-largest economy could widen the budget deficit from 5.1% to 5.6% of GDP in 2026.