Euro Slumps to One-Year Low as US Inflation Climbs

US inflation remains elevated, with October figures showing a 2.6% increase year-over-year, up from 2.4% the previous month. Core inflation, which excludes volatile food and energy prices, rose 3.6% on an annual basis. This persistent inflation suggests the Federal Reserve's battle to control inflation may not be over, despite market expectations of a modest rate cut in December. Rising inflation has also driven US Treasury yields higher, with the 10-year yield reaching 4.47%, its highest level since July, further boosting the dollar’s appeal among investors seeking higher returns.

Meanwhile, Europe faces economic uncertainty and political challenges that weigh on the euro. Potential trade tensions between the US, China, and the EU could add pressure on the European economy, reinforcing the euro’s downtrend. With few fundamental factors supporting the euro, analysts expect its weakness against the dollar to continue in the near term.