Euro drops sharply: Euro hits lowest level against the dollar in 17 months

6 October 2026, 08:31·29·Economy

The European single currency came under severe pressure in the international currency market. According to data provided by the influential financial publication Bloomberg, the euro exchange rate fell to its lowest level against the US dollar since May 2025.

Leading financiers and experts around the world cite serious political instability within the eurozone, financial risks observed in member countries, and the strengthening of the US dollar overseas as the main reasons for this crash.

Figures on the exchange: 0.8 percent drop

According to the results of the morning trading session on Monday, October 5, the following dynamics were recorded on the market:

Sensational rate: The European currency depreciated by 0.8 percent at once, dropping to the level of $1.1161;
17-month anti-record: This figure is the lowest point in nearly the last 1.5 years, undermining the long-term stability of the currency pair.

What is dragging the euro down? Risks in Madrid and Paris

Analysts note that internal political factors are having a major impact on the weakening of the European currency:

Political fluctuations in Spain: Official Madrid's decisions are alarming investors. Prime Minister Pedro Sanchez scheduled early parliamentary elections for November 29 against the backdrop of widespread public protests against the new housing legislation;
Collapse of French government bonds: The drop in the value of government bonds in France, the union's second-largest economy, further intensified anxiety in the financial markets.

The dollar's assault: The Fed's decision is changing markets

Another important aspect of the euro's weakening has been the active strengthening of the US national currency against all major global currencies:

Interest rate expectations: Investors assume that the US Federal Reserve System (Fed) may raise benchmark interest rates again to stop a resurgence of inflation;
Capital flight: Expectations of higher rates are prompting foreign investors to move away from euro assets and switch to the US dollar, where high returns and safety guarantees are assured.

Financial experts emphasize that political elections in Europe and central bank decisions will determine the future movement of the euro exchange rate in the near term.