30.09.202607:03:47UTC+00Euro Ends September Under Pressure

The euro ended September near $1.135, hovering close to its lowest level since May 2025, after losing more than 2% against the US dollar over the month amid expectations that the ECB will tighten policy more slowly than the Federal Reserve. Markets are pricing in additional ECB rate hikes over the coming year, with the next move potentially arriving in December alongside updated economic projections. At the same time, expectations for another Fed increase remain elevated, although recent remarks from New York Fed President John Williams have reduced the perceived likelihood of a hike in October.

Inflation in France and Spain accelerated more than anticipated in September, but ECB President Christine Lagarde noted that the latest surge has not yet produced significant second-round effects, suggesting a more measured policy approach. Weak eurozone growth, forecast at just 0.9% for this year, may further constrain aggressive tightening. Political uncertainty ahead of elections in France, Spain, and Italy next year is also adding pressure on the single currency.