Euro Slides on Weak German Ifo Data

The euro weakened toward $1.178, retreating from a four-year high of $1.192 touched on September 17, after weaker-than-expected German sentiment weighed on the currency.

The Ifo Business Climate Index fell 1.2 points to 87.7 in September, its lowest since May and below market expectations of 89.3.

This followed a mixed HCOB PMI survey showing the Eurozone private sector expanding in September, led by stronger-than-expected services while manufacturing slipped back into contraction.

Meanwhile, investors digested remarks from Fed Chair Jerome Powell, who reiterated a cautious stance on future rate decisions amid persistent inflation pressures from tariffs and a softening labor market.

Money markets now price in over a 90% chance of a Fed rate cut in October, with attention turning to Friday’s US PCE price index for guidance.