Euro struggles against US Dollar as hawkish Fed outlook weighs
- EUR/USD struggles to attract buyers as traders favour the higher-yielding US Dollar.
- The war in the Middle East keeps inflation risks and Treasury yields elevated.
- Political uncertainty in Germany and fiscal concerns in France add to the Euro’s weakness.
EUR/USD trades with a downside bias on Monday as the US Dollar holds near recent highs, supported by expectations of additional Federal Reserve (Fed) interest rate hikes. Developments in the Middle East also remain in focus. At the time of writing, EUR/USD trades around 1.1473, hovering near levels last seen in late July.
The US Dollar Index, which tracks the Greenback against a basket of six major currencies, trades around 100.36, close to the seven-week high of 100.56 touched on Friday.
However, a modest pullback in US Treasury yields amid falling Oil prices limits the Greenback’s advance. The benchmark 10-year US Treasury yield trades around 4.97%, below the 5.04% level touched last week, its highest since 2007.
Despite the pullback, US Treasury yields stay elevated as the war in the Middle East keeps inflation concerns alive, while a geopolitical risk premium remains embedded in energy prices.
US President Donald Trump said he would probably be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly this week. Markets also await the Trump-Xi summit, scheduled for September 23–25.
On the monetary policy front, both the Fed and the European Central Bank (ECB) raised interest rates by 25 basis points last week and kept the door open to additional tightening to bring inflation back towards their respective 2% targets.
Against this backdrop, the Euro stays vulnerable as traders favour the higher-yielding US Dollar. The Eurozone’s dependence on imported energy also increases the risk of stagflation, as higher energy costs could keep inflation elevated while weakening economic growth.
Political uncertainty in Germany and fiscal concerns in France add pressure on the shared currency. Chancellor Friedrich Merz’s Christian Democratic Union suffered heavy losses in Germany’s state elections, while the far-right Alternative for Germany won in Mecklenburg-Western Pomerania and the far-left Left Party finished first in Berlin.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.14% | 0.31% | 0.18% | -0.03% | -0.03% | -0.16% | |
| EUR | -0.05% | 0.03% | 0.22% | 0.06% | -0.14% | -0.16% | -0.26% | |
| GBP | -0.14% | -0.03% | 0.19% | 0.04% | -0.15% | -0.20% | -0.28% | |
| JPY | -0.31% | -0.22% | -0.19% | -0.13% | -0.37% | -0.33% | -0.43% | |
| CAD | -0.18% | -0.06% | -0.04% | 0.13% | -0.23% | -0.22% | -0.31% | |
| AUD | 0.03% | 0.14% | 0.15% | 0.37% | 0.23% | 0.00% | -0.10% | |
| NZD | 0.03% | 0.16% | 0.20% | 0.33% | 0.22% | -0.00% | -0.10% | |
| CHF | 0.16% | 0.26% | 0.28% | 0.43% | 0.31% | 0.10% | 0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
