Given stronger-than-expected US inflation, the EUR/USD pair has fallen to its lowest level since May 2025. The rising interest rate hike fantasies associated with this situation are boosting the dollar, causing problems for the common currency. Moreover, ten-year US government bond yields are also rising in this context, which continues to be above the 5% mark. At the same time, investors are now expected to look forward to further US economic data this week.
EUR/USD Chart
US government bonds (10 years)
US inflation in September at 3.7 percent
The inflation rate rose by 3.7 percent in September compared to the same month last year. Compared to the previous month, the price increase increased by 0.6 percent.
Further economic data in focus on Thursday: Producer prices, retail sales and weekly initial claims ahead
On Thursday, for example, attention will be focused on US producer prices, US retail sales, as well as the weekly initial applications for US unemployment benefits (14:30). Also expected on Thursday night is a speech by Fed Chairman Kevin Warsh (05:30).
Overall, the current trading week is likely to continue to be characterized by monetary policy developments beyond the Atlantic. According to the CME Group’s „Fed Watch Tool,“ only 50.7 percent of market participants expect a pause in interest rates at the October meeting (October 28, 2026), and 49.3 percent expect an increase in interest rates, totaling a quarter of a percentage point, to a range of 4.00 to 4.25 percent. A day before the data was released, the probability of an interest rate hike was still 22.1 percent.
