Euro's Strong Run Against Dollar Falters on Energy Prices and Political Risks
The euro's recent surge against the dollar is losing steam as energy prices and Europe's political risks resurface, threatening to undermine its resilience.
After nearing $1.20 in August, the currency has retreated about 2% this month to around $1.14, its weakest level of the year so far.
The decline comes as a stronger dollar gains support from expectations around US monetary policy, while investors reassess Europe's ability to withstand another energy shock.
According to Jane Foley, senior currency strategist at Rabobank, 'How long can this growth resilience last?' she asked, adding that investors need to consider whether European growth can remain resilient through the winter, particularly with political uncertainty potentially becoming more disruptive in the spring.