Euro Slumps Below $1.135 Amid Rising Oil Prices and Treasury Yields

The euro has dropped below $1.135 for the first time since late June, and is now trading near its levels from mid-2025. This decline is largely attributed to external factors, rather than internal economic conditions.

The Euro Area economy remains resilient, with growth seemingly unaffected by the recent spike in energy prices. Additionally, the European Central Bank (ECB) appears poised to raise interest rates again in December.

However, rising oil prices and surging Treasury yields create an environment that is not conducive to a strong euro. This morning's French inflation figures showed a headline measure above 3% for the first time since January 2024. A similar reading in Friday's Euro Area-wide figures may solidify bets on a December rate increase.