Euro Tests $1.1380 as Energy Inflation Complicates ECB Outlook

The euro remained under pressure on September 28 as rising energy prices and a firm US dollar kept EUR/USD close to a two-month low. EUR/USD traded around $1.1379, while the pair was heading toward a September decline of roughly 2%. The move came as investors assessed how higher energy costs could affect European inflation and monetary policy. The latest oil surge is particularly relevant for the euro area because imported energy costs can feed directly into headline inflation while simultaneously weakening household purchasing power and business margins. The European Central Bank therefore faces a difficult policy balance. Persistent energy inflation can argue for caution on easing, but weaker activity caused by expensive energy can limit the case for tighter policy. The dollar's strength is another source of pressure. US markets are pricing a relatively restrictive Federal Reserve path, widening the policy contrast that has supported the greenback. MarketMindFX View: EUR/USD remains focused on the $1.14 area. A sustained break below that zone would keep attention on lower levels, while a recovery above $1.15 would ease immediate downside pressure. SEO Title: EUR/USD Near Two-Month Low as Energy Costs Hit Euro Meta Description: EUR/USD tests two-month lows as higher oil prices and dollar strength complicate the ECB policy outlook. Keywords: EUR/USD, euro, ECB, oil prices, inflation, forex Image Credit: Euro Banknotes by Milad Mosapoor, Wikimedia Commons. Euro banknote reproduction is subject to ECB reproduction conditions. Source: Reuters, September 28, 2026. MarketMindFX analysis.