The US dollar rose sharply on Wednesday against the euro, reaching its highest level since May 2025. The euro fell below the 1.11 dollar threshold for the first time since April 2025, retreating to around 1.10 dollars, in a context marked by US inflation running above expectations and prospects for higher interest rates in the United States.
US inflation reinforces expectations of a rate hike
This advance of the greenback comes after Tuesday’s data showing US inflation in October higher than expected.
This development could prompt the Federal Reserve to raise its policy rates meaningfully at its December meeting.
Investors are considering a 50 basis point increase, i.e., 0.50 percentage point, a prospect that supports the US currency against the euro.
Oil stabilizes amid tensions in the Strait of Hormuz
Meanwhile, financial markets are moving in a climate of uncertainty, marked in particular by tensions around the Strait of Hormuz.
Attacks on ships in this strategic area have helped to curb the recent decline in oil prices, leading to a stabilization of Brent.
Across the European continent, several factors continue to affect investor confidence.
Political and budgetary uncertainties in France, concerns about the slowdown of the European economy, as well as speculation around the appointment to the presidency of the European Central Bank (ECB) are increasing pressure on the single currency.
These elements come as the dollar benefits from expectations of further monetary tightening in the United States.
