Euro Sinks to Multi-Week Lows as Dollar Bids Re-emerge

The euro extended its decline, falling below the 1.115 level and approaching its October multi-month lows, as the US dollar remained supported by expectations of further Federal Reserve tightening in December. Financial markets have started pricing in a 50 basis points interest rate hike in December, following the release of the hotter-than-projected United States Consumer Price Index data for October. Monthly core CPI came in at +0.30% versus +0.2% expected, marking the third consecutive month with core CPI at +0.3%. Hawkish remarks from Federal Reserve Governor Christopher Waller and stronger-than-expected US inflation reinforced expectations of additional Fed tightening in December.

The pair's decline has been compounded by headwinds from within the euro area. The euro remains under pressure from France's political and fiscal challenges and uncertainty surrounding ECB President Christine Lagarde's potential early departure. France's National Assembly rejected the revenue measures on 4 November, defeating the 2027 budget at its first reading, with Prime Minister Sébastien Lecornu expected to use Article 49.3 to pass the budget without a vote. Despite this, the ECB maintains a hawkish stance. ECB Chief Economist Philip Lane signaled that another rate increase in December may be necessary, adding to growing calls among policymakers for a third hike this year.

The Federal Reserve left the federal funds rate unchanged at 3.75%–4.00% at its October 2026 meeting, following a 25bps hike in September, and two policymakers voted for a 25bps rate hike. The European Central Bank left interest rates unchanged at its October 2026 meeting, keeping the main refinancing rate at 2.65% and the deposit facility rate at 2.50%. The 150-basis-point differential continues to exert pressure on the euro in an environment where rate expectations have shifted materially in favour of the dollar.

What the calendar says

Friday 13 November at 10am London time brings the eurozone's revised third-quarter GDP figure, updating the initial estimate of 0.4% growth in July–September. A meaningful revision could move the euro ahead of month-end inflation estimates. Wednesday 18 November at 2pm Eastern Time sees the release of the UK inflation print, final eurozone inflation and Fed meeting minutes. The minutes from the October 27–28 FOMC meeting are scheduled for November 18, 2026 at 2:00 PM Eastern Time. Regional inflation figures offer an early indication of price pressures ahead of the eurozone's November inflation estimate on 1 December, an important release before the ECB's next decision. The December policy meetings—the Federal Reserve on 9 December and both the Bank of England and ECB on 17 December—loom large, and November's data will shape those outcomes.

Technical picture

On the chart, EUR/USD has traced a steady descent from the 1.1270 highs reached in early November to a current print near 1.1070. The pair tested resistance repeatedly around 1.1235–1.1270 between late October and early November but failed to sustain those gains. A sharp leg lower broke through the mid-October consolidation zone near 1.1200, and price has since breached the 1.1140 support that held for much of the first week of November.

The structure suggests a downtrend resumption after a shallow correction. The October lows near 1.1100 now come back into focus as immediate support, with a break below opening the door to the 1.1070 level printed on the right edge of the chart. Resistance has shifted lower: reclaiming 1.1140 would be the first step toward stabilisation, but a move back above 1.1200 would be required to challenge the recent bearish sequence. The in-house signal engine reading EUR/USD Sell aligns with the price action visible on the hourly time frame, where momentum remains tilted to the downside and rallies have been shallow and short-lived.