13.03.202609:02:16UTC+00Euro Falls to Over Seven-Month Low

The euro extended its recent slide, dropping below $1.15 to its weakest level since late July, as the US dollar strengthened broadly amid intensifying tensions in the Middle East. With no signs of de-escalation, the common currency came under further pressure from Brent crude rising above $100 per barrel, underscoring Europe’s persistent vulnerability: higher energy costs worsen the trade balance and weigh on the euro. The renewed surge in energy prices has led money markets to price in two European Central Bank rate hikes this year—a sharp reversal from just a month ago, when no policy changes were anticipated. Attention is now turning to the ECB’s upcoming policy meeting, where President Christine Lagarde is expected to outline how the bank intends to shield the euro area from inflationary pressures triggered by the conflict. Earlier this week, she stressed that the ECB stands ready to act to avoid a repeat of the post–Russia–Ukraine invasion inflation shock.