2026.10.0708:32:50UTC+00Euro Falls Toward 17-Month Low

The euro slipped below $1.12, nearing the 17‑month low of $1.116 reached earlier this week, as rebounding oil prices and persistent fiscal worries continued to weigh on market sentiment. Brent crude climbed back above $100 a barrel after Iran stepped up attacks on shipping in the Strait of Hormuz, bolstering expectations that major central banks will deliver further interest-rate increases.

Money markets now anticipate roughly 75 basis points of additional tightening by the ECB and about 85 basis points by the Federal Reserve by the end of next year. At the same time, French government bonds remain under pressure as political uncertainty ahead of the 2027 election casts doubt on the country’s ability to restore its public finances. The minority government has presented a deficit-reduction plan, but the national fiscal watchdog has warned that its underlying economic assumptions are “optimistic.”

Political risks are also intensifying elsewhere in Europe, with Spain calling a snap election for November 29 and Italy set to hold national elections next year.