FX.co ★ Euro Weakens to One-Month Low

The euro has continued its downward trajectory against the US dollar, currently trading at $1.163, marking its lowest value in over a month. This decline comes as investors analyze economic data from both the Eurozone and the US, alongside differing monetary policies from their respective central banks. Germany witnessed a GDP growth of 0.2% in 2025, breaking a two-year period of economic contraction. This growth was primarily driven by household and government spending, although the manufacturing sector remains a point of concern, casting uncertainty over future prospects. Meanwhile, inflation across the Eurozone decelerated to 2.0% in December, aligning with the European Central Bank's target and reinforcing the anticipation that interest rates will stay unchanged. ECB official François Villeroy de Galhau termed expectations of an interest rate hike in 2026 as "unrealistic" this week. Conversely, in the United States, retail sales exceeded expectations, providing support for the dollar, despite earlier data indicating a slower-than-expected rise in inflation.