The euro slipped below $1.115, trading near its weakest level since April 2025, as investors awaited the European Central Bank’s policy decision. Sentiment remained fragile, weighed down by France’s worsening fiscal outlook and rising unease in bond markets.
The ECB is widely expected to keep interest rates on hold amid clear signs of slowing economic growth, shifting the focus to its forward guidance. Upcoming eurozone GDP figures, due Friday, are forecast to confirm softer growth, highlighting the impact of summer heatwaves, low water levels on key waterways, and a global rise in bond yields.
Inflation signals across the bloc remain mixed. Germany’s fuel-tax rebate and easing price pressures in Spain are both expected to contribute to more moderate inflation readings in the near term.
In the United States, the Federal Reserve also left interest rates unchanged on Wednesday, as broadly expected. Even so, markets are now pricing in the possibility of rate hikes from both the ECB and the Fed in December.
