Euro Hits 16-Month Low; German CPI and U.S. PCE in Focus

Euro Hits 16-Month Low; German CPI and U.S. PCE in Focus

30.09.2026 New

On the previous business day, U.S. currencies held steady against the backdrop of high U.S. interest rates. However, the August JOLTS job openings figure came in at 7.079 million, falling short of market expectations, and the Conference Board’s September Consumer Confidence Index deteriorated to its lowest level in about 12 and a half years.After New York Fed President Williams indicated that there was no need to rush additional rate hikes, the probability of an October rate hike temporarily fell from about 70 percent to around 50 percent. While long-term interest rates remain high, near-term expectations regarding U.S. monetary policy have been revised downward.

Among European currencies, the euro fell to the low $1.13 range against the dollar and is trading near its lowest level since May 2025. The pound is also trading in the low $1.32 range against the dollar, near its lowest level in about three months.While the U.S. economy and high interest rates are providing support, rising energy prices and political and fiscal concerns in Europe are weighing on the euro. Today, in addition to the revised UK GDP figures for the April–June quarter, Germany’s preliminary September CPI data will be released; the year-over-year rate is expected to accelerate to 3.1% from the previous reading of 2.9%.

Next on the calendar are the U.S. September ADP employment report and the August PCE deflator. Core PCE is expected to rise 0.3% month-over-month, accelerating from the previous reading of 0.2%; if the result is strong, it could further cap gains in the euro/dollar and pound/dollar pairs due to expectations of additional rate hikes.On the other hand, if Germany’s CPI comes in above expectations, speculation about further ECB tightening could support the euro; therefore, it will be important to assess the divergence in inflation and interest rate outlooks between Europe and the U.S.