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2026.07.0808:46:44UTC+00Euro Near One-Year Low as Oil Surge Weighs on Outlook

The euro hovered around $1.14, near its weakest level in a year, as rising oil prices stoked inflation concerns and strengthened expectations for further European Central Bank interest rate hikes, darkening the Eurozone’s economic outlook. Brent crude climbed to a two-week high following renewed US–Iran strikes, after US President Trump stated that, as far as he is concerned, the Iran ceasefire is over.

Money markets are now pricing in more than 30 basis points of additional ECB tightening this year, implying at least one further rate increase, potentially as early as September.

On the political front, Germany’s cabinet approved a draft budget for 2027 that foresees €555.4 billion in spending and increases net borrowing to €203.6 billion, up from earlier projections. In France, far-right leader Marine Le Pen confirmed she will run in the 2027 presidential election, with current polls favoring her National Rally party, even as uncertainty persists over who will succeed President Emmanuel Macron.

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