Euro hits lowest level since May 2025 against the US dollar

The euro touched 1.1312 dollars, before recovering slightly, according to reports. September data showed the dollar appreciating by nearly 2.5% against the European currency, on its way toward its biggest monthly gain against the euro in the last 14 months, with the European currency having dropped on Tuesday to 1.1312 dollars, its lowest level since May 2025, according to Reuters. Data from the National Bank of Romania showed the dollar quoted at 4.6568 lei on Wednesday, compared to 4.6397 lei in the previous session, while the euro was quoted at 5.2780 lei.

French Borrowing Costs Hit Highest Level Since 2012

Market pressure intensified due to fears that borrowing cost disparities among eurozone states could widen. The yield spread between 10-year French OATs and German Bunds exceeded 115 basis points, marking the highest level recorded since 2012, as reported by Mediafax and Evz. SOURCE 3 noted that the European Central Bank raised its deposit facility rate by 25 basis points to 2.50% on September 10, 2025, projecting an average inflation rate of roughly 3.0% for 2026. SOURCE 5 reported that European Central Bank President Christine Lagarde advocated for a prudent approach given restrictive financial conditions, while the French Senate prepared to review the national budget ahead of approaching political milestones, with pressures likely to persist as the French Senate is set to rule on the budget and ahead of the approaching 2027 presidential election. Meanwhile, the preliminary eurozone composite PMI climbed to 53.1 in September from 52.0, reaching its highest level since April 2023, with improvement becoming broader as Germany continued to recover and France recorded growth in economic activity for the first time in ten months.

Strong US Indicators Push Treasury Yields Past 5%

Source 3 reported that US economic indicators added strong upward momentum to the dollar, with the S&P Global composite PMI rising to 58.4 in September 2025 from 56.0, accompanied by higher price pressures and the fastest employment growth in the last four years. SOURCE 4 noted that benchmark 10-year US Treasury yields climbed past 5%, a threshold untouched since 2007, following weak demand at a five-year Treasury auction. Federal Reserve Bank of New York President John Williams stated that there is no need for urgency regarding a new interest rate hike.

Energy Costs And Impact On Romania

Mediafax and Evz reported that European natural gas prices climbed in September 2025 to their highest point since 2022, creating an asymmetrical burden for European energy importers. Both outlets noted that while a stronger dollar raises import costs for raw materials and fuel priced in US currency, domestic pump prices in Romania depend on international oil quotations, local distribution margins, logistics, and taxes rather than exchange rates alone.

US Inflation Metrics Will Drive Future Currency Movements

Evz reported that future currency movements will depend heavily on upcoming US inflation metrics and the employment report. Investors continue to monitor energy price trajectories and fiscal developments within major eurozone economies to gauge whether the European Central Bank will adjust rates further before the end of the year.