EUR/USD Forecast: Fed Hike Bets Ease, 19-23 Oct 2026

Our EUR/USD forecast for 19-23 Oct 2026 starts with a pair that steadied after a volatile week. EUR/USD closed Friday 16 October at 1.1240, up 0.34% on the week, after a hot US inflation report briefly pushed the euro to its lowest level of 2026. Fed officials then cooled bets on an October rate hike. This week, flash PMIs on Friday 23 October and unrest in France are the main tests before the Fed and ECB meet the following week.

Watch the latest technical analysis from our in-house experts.

Key takeaways

• US consumer prices rose 3.7% year on year in September, the Bureau of Labor Statistics reported on Wednesday 14 October, and EUR/USD fell to a 2026 low of 1.1113 that day.
• EUR/USD recovered to close Friday 16 October at 1.1240, a weekly gain of 0.34%, as Fed officials tempered expectations of an October hike.
• Eurostat confirmed on Friday 16 October that euro area inflation rose to 3.8% in September, up from 3.2% in August.
• Markets priced an 84% chance that the Fed holds rates on Wednesday 28 October, according to CME FedWatch data cited by Reuters on Monday 19 October.
• Flash PMIs for Germany, the euro area and the US on Friday 23 October are this week's main scheduled data releases.

EUR/USD price today: where things stand

EUR/USD, the currency pair that shows how many US dollars one euro buys, traded around 1.1230 as of 04:31 UTC, 19 Oct 2026, according to FXStreet. That is slightly below Friday's close of 1.1240, up from 1.1202 a week earlier, according to Investing.com data. The gain was 38 pips, the smallest standard price increment for the pair.

Last week's range ran from a low of 1.1113 on Wednesday 14 October to a high of 1.1269 on Friday 16 October. Reuters reported that the euro had fallen more than 3% against the dollar over the previous five weeks. You can follow EUR/USD and other forex CFDs on Kudo.

What moved EUR/USD last week

Hot US inflation lifted the dollar to an 18-month high

The Bureau of Labor Statistics reported on Wednesday 14 October that US consumer prices rose 0.6% in September and 3.7% over the year, up from 3.4% in August. Energy prices were up 20.4% over 12 months, while core inflation, which strips out food and energy, rose to 2.6%. Bets on another Fed hike rose sharply, Reuters reported, and the dollar index climbed to a 1.5-year high near 103. EUR/USD dropped to 1.1113, which FXStreet described as a fresh 2026 low.

Fed officials cooled bets on an October hike

The dollar gave back those gains from Thursday 15 October. FXStreet noted that US producer prices rose 6.3% year on year, the biggest gain since 2022, yet Treasury yields fell as Fed officials said the central bank could wait for more clarity before acting again. Speaking in Bangkok on Friday 16 October, Fed Chair Kevin Warsh said he does not "prejudge meetings", according to Reuters. CME FedWatch showed a 72% chance of a hold in October that day, Reuters reported. EUR/USD rose 0.56% on Thursday, according to Investing.com data.

AI stock wobbles weighed on the US dollar

A sell-off in AI-related shares, including questions over CoreWeave's debt, added to dollar weakness. Reuters reported that the US 10-year Treasury yield was heading for its largest weekly fall in more than a year. Brent Donnelly of Spectra Markets told Reuters that a serious repricing of the AI investment boom "should be unambiguously dollar bearish". The dollar index finished the week below 102.

Euro area inflation confirmed at 3.8%

Eurostat confirmed on Friday 16 October that euro area inflation rose to 3.8% in September, with energy prices up 18.9% and core inflation at 2.5%. In a statement to the IMF on Saturday 17 October, ECB President Christine Lagarde said the energy shock is "too large to 'look through'", after rate hikes in June and September. FXStreet noted that expectations of further ECB hikes offered the euro only limited support.

EUR/USD forecast: what could move price this week

The Fed is in its quiet period before its 27-28 October meeting, so euro area data and ECB speakers take centre stage. Key events from the economic calendar:

• Tue 20 Oct, 09:05 UTC: ZEW Economic Sentiment, Germany and euro area (euro area previous 25.8)
• Wed 21 Oct, 16:30 UTC: ECB President Christine Lagarde speaks in Wiesbaden
• Fri 23 Oct, 07:30 UTC: Germany flash PMIs, October
• Fri 23 Oct, 08:00 UTC: Euro area HCOB flash PMIs, October (composite previous 53.1)
• Fri 23 Oct, 13:45 UTC: US S&P Global flash PMIs, October (manufacturing consensus 55.5, previous 55.9)
• Fri 23 Oct, 14:00 UTC: University of Michigan consumer sentiment, final October (consensus 46.3, previous 46.3)

Flash PMIs on Friday 23 October

Purchasing managers' indices (PMIs) survey businesses on output and orders, and a reading above 50 signals growth. The euro area composite PMI stood at 53.1 in September, according to Investing.com. Firm euro area readings alongside softer US figures could support the euro, as they would back the case for more ECB tightening. A drop in euro area activity, with high energy costs biting, could weigh on the pair.

Lagarde and the ECB before the 29 October decision

The ECB's next monetary policy decision is on Thursday 29 October, one day after the Fed's announcement on Wednesday 28 October. Lagarde's appearance on Wednesday 21 October comes a week before that decision. Scotiabank, cited by FXStreet, said tensions in French government bonds "tilt ECB risks away from hiking at the end of the month", while a December hike is all but fully priced. Hawkish signals from ECB officials could lift the euro; caution about growth could weigh on it.

ZEW sentiment on Tuesday 20 October

The euro area ZEW reading fell to 25.8 in September, well below the 39.2 forecast, according to Investing.com. Another weak result would add to concerns that higher energy prices and borrowing costs are slowing the economy.

Other risks to watch

Political unrest in France is the most immediate risk. Reuters reported that President Emmanuel Macron condemned "shocking" scenes of violence after cost of living protests turned violent, and the euro slipped 0.1% at the Asian open on Monday 19 October. Kieran Williams of InTouch Capital Markets told Reuters the unrest matters for the euro "mainly through French bonds". Energy is another risk: Reuters reported Brent crude at $108.02 on Monday, down 1.7%, with the Iran war still keeping prices high.

Bullish and bearish scenarios

Bullish case for EUR/USD

If euro area PMIs beat expectations and Lagarde signals that more tightening is needed, markets could add to ECB hike bets, which could support the euro. A calmer situation in France, or further weakness in AI-related US assets that pushes Treasury yields lower, could also weigh on the dollar and lift EUR/USD.

Bearish case for EUR/USD

If French unrest deepens and pushes French bond yields higher, investors could reduce exposure to the euro. Strong US PMIs could revive expectations of an October Fed hike, which could support the dollar. Higher oil prices from an escalation in the Middle East could also hurt the euro area economy more than the US, weighing on the pair.

EUR/USD FAQ

Why did EUR/USD go up last week?

EUR/USD rose 0.34% in the week to Friday 16 October as Fed officials cooled expectations of an October rate hike and US Treasury yields fell. A sell-off in AI-related shares also weighed on the dollar, Reuters reported. The gain came after a hot US inflation report had pushed the pair to a 2026 low of 1.1113 on Wednesday 14 October.

Will the Fed raise interest rates in October 2026?

Markets see a hike as unlikely. CME FedWatch data cited by Reuters on Monday 19 October showed an 84% chance that the Fed holds rates on Wednesday 28 October. FXStreet reported that markets still price at least one more 25 basis point hike before the end of the year. Fed Chair Kevin Warsh has said he does not "prejudge meetings".

Is the ECB raising interest rates?

Yes. ECB President Christine Lagarde said on Saturday 17 October that the ECB raised its key rates by 25 basis points in September, following an increase of the same size in June. The next decision is on Thursday 29 October. Scotiabank, cited by FXStreet, said a December hike is all but fully priced.

How does unrest in France affect the euro?

Unrest can raise doubts about France's public finances and push up French government bond yields, which can weigh on the euro. Reuters reported that the euro slipped 0.1% at the Asian open on Monday 19 October after violent protests over the weekend. Analysts quoted by Reuters said the main channel is the French bond market.

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