The euro dropped below $1.07, marking its lowest point since late June, as traders weigh economic, monetary, and political factors.
Euro trades at four months low
Speculation that the ECB will pursue more aggressive rate cuts than the Fed is pressuring the euro, while the dollar is strengthening on expectations that Donald Trump’s policies could stoke inflation, potentially limiting the Fed's room for future rate cuts.
Next ECB moves
The ECB is anticipated to implement a 25 basis point rate cut in December, with market projections suggesting a reduction to 2% by June. Meanwhile, in Germany, Chancellor Olaf Scholz has indicated openness to moving the parliamentary vote of confidence to before Christmas, raising the possibility of an early election.
