Euro hit fresh low against dollar in more than a year and a half

The European currency continues to rapidly depreciate against the US dollar. On Thursday, November 12, 2026, the euro again renewed its yearly low: the EUR/USD pair fell to $1.1055, reaching its lowest level since April 2025. On Friday, November 13, pressure on the European currency persisted: the pair already dropped to $1.1049.

Thus, the euro found itself under pressure from several negative factors at once. The main one is the sharp strengthening of the dollar against the backdrop of revised expectations regarding the future policy of the US Federal Reserve. Additional problems are created by rising oil prices, geopolitical tensions, and persistent doubts among investors about the eurozone's economic prospects.

Why the euro continues to fall

Analysts highlight several reasons for what is happening.

1. The market expects a more hawkish Fed policy. The main driver of the US currency's strengthening was the inflation data in the US released on Tuesday. Consumer price growth exceeded expectations, intensifying concerns about persistent inflationary pressure. Statements by Fed representatives also had an additional impact. In particular, Christopher Waller allowed for the possibility of an immediate 0.5 percentage point rate hike at the December meeting if inflation does not begin to slow down.

Now investors are almost certain of further tightening of US monetary policy. The probability of a 0.25 percentage point rate hike in December is estimated at about 85–90%. As a result, US government bond yields sharply increased, and the dollar strengthened to its highest levels in about 19 months.

2. Geopolitics and rising oil prices work against the euro.

Another negative factor was new concerns about the situation in the Middle East. Reports of attacks on energy infrastructure and problems with shipping in the Strait of Hormuz area triggered a rise in oil prices.

For the eurozone, this is particularly unpleasant: the European economy significantly depends on imports of energy resources, payments for which are mainly made in dollars.

Thus, the rise in oil prices simultaneously increases inflationary risks and worsens Europe's economic growth prospects.

3. Eurozone economic prospects remain unconvincing.

The European economy is not yet showing sufficient signs of acceleration. Investors fear that high energy costs and external economic risks will restrain business activity.

At the same time, even expectations of a possible ECB rate hike in December do not yet help the euro. The market believes that the US Fed may act more decisively, meaning the dollar's advantage in terms of interest rates will persist.

What events to watch

Today, November 13, the attention of currency traders will be focused on several important publications at once:

• Eurozone GDP for the third quarter. Economic growth of 0.4% on a quarterly basis and 1.3% on an annual basis is expected. Weak figures may intensify euro selling.
• Eurozone employment statistics. Deterioration in the labor market would be an additional argument for caution regarding the European economy.
• US Producer Price Index (PPI). Publication is expected today. The indicator is forecast to rise by 0.4% month-on-month and 6.6% year-on-year. Higher values may further strengthen the dollar.
• US retail sales on November 17. Strong consumer activity will indicate the resilience of the American economy and may support expectations of further Fed rate hikes.
• Final eurozone inflation data on November 18. They will help assess how much the ECB really needs to tighten monetary policy.

What to expect from the euro in the near future

In the short term, the situation for the European currency remains unfavorable. If US statistics continue to demonstrate economic resilience and high inflation, the dollar may receive an additional boost for growth.

Particularly important is whether EUR/USD can hold above the psychological level of $1.1000. A break of it could trigger a new wave of euro selling.

For the European currency to recover, it needs to return above $1.1100–1.1150. The next serious target for buyers will be the $1.1200 area.

However, it is still premature to count on a quick reversal. Even if US economic data turn out weaker than forecasts, a sustainable euro recovery will require a shift in expectations regarding Fed policy.