Euro opens the week higher

The euro rose in European trading on Monday against a basket of global currencies, starting the week on a positive note versus the US dollar, as the dollar’s rally paused after a strong run of gains.

The single currency’s rebound was also supported by a decline in expectations that the European Central Bank will cut interest rates in February 2026, particularly amid recent improvements in economic activity across the euro area, alongside expectations that this improvement will continue as downside risks ease.

Price overview

Euro exchange rate today: the euro rose about 0.15% against the dollar to $1.1722, from an opening level of $1.1708, after touching an intraday low of $1.1706.

The euro ended Friday’s session down 0.15% against the dollar, marking a fourth consecutive daily loss, as corrective moves and profit-taking continued from a three-month high at $1.1804.

The euro lost 0.3% against the dollar last week, recording its first weekly loss in a month, amid slower investment demand for the single currency.

US dollar

The dollar index fell by more than 0.1% on Monday, retreating from a one-week high and heading toward its first loss in four sessions, reflecting a pause in the dollar’s advance against a basket of major and minor currencies.

Beyond corrective moves and profit-taking, the dollar weakened following cautious comments from some Federal Reserve officials, which highlighted growing concern over softness in US labor market indicators.

European interest rates

In line with expectations, the European Central Bank kept its key interest rates unchanged last week at 2.15%, the lowest level since October 2022, marking the fourth consecutive meeting with no change.

The ECB reaffirmed its data-dependent, meeting-by-meeting approach, without committing to a specific interest rate path, noting that current rates are appropriate given stable inflation and economic growth.

ECB President Christine Lagarde said the bank remains in a “good position” and stressed that there is consensus within the Governing Council to keep all options open, including the possibility of raising rates if necessary.

Money market pricing for a 25-basis-point rate cut by the ECB in February 2026 currently remains below 10%.

To reprice those expectations, investors are awaiting further euro area economic data on inflation, unemployment, and wage growth.