The euro weakened around 2% this month to about $1.135, its lowest reported level since May 2025, after approaching $1.20 in August. Stalled negotiations over reopening the Strait of Hormuz have pushed oil prices higher and increased demand for the US dollar as a safe haven, while disruptions to liquefied natural gas shipments have sent European gas prices above €80 per megawatt hour. Investors are also assessing ECB President Christine Lagarde’s comments, eurozone inflation above 3% and political risks including French debt concerns and pressure on Germany’s Chancellor Friedrich Merz. Spain’s harmonized inflation reached 5% in September. Markets expect the ECB to hold rates on October 29 before potentially resuming tightening in December, with pricing indicating as many as four increases over the following year, although earlier forecasts had indicated at least one additional increase this year.