Euro: Fiscal stress and fewer ECB hikes weigh against US Dollar – BBH

Euro: Fiscal stress and fewer ECB hikes weigh against US Dollar – BBH

Source: EODHD - https://www.fxstreet.com/news/euro-fiscal-stress-and-fewer-ecb-hikes-weigh-against-us-dollar-bbh-202610051555
Published: Oct 05, 2026 11:55 AM

Brown Brothers Harriman’s (BBH) Elias Haddad reports the Euro (EUR) is underperforming major currencies, with EUR/USD briefly hitting 1.1161, its lowest since May 2025. Elias Haddad flags France’s budget crisis spilling into wider Eurozone bond markets and complicating potential European Central Bank (ECB) Transmission Protection Instrument activation, leaving the Euro pressured by rising fiscal risk and expectations of a shallower ECB hiking cycle.

Market context: This update is relevant to EUR traders, with EURUSD as the primary instrument to monitor for follow-through, trend continuation, or headline volatility.