Euro falls to one-month low near $1.1525 ahead of the Fed
Updated September 26, 2026. · Written by Svetoslav Grigorov
Seventh correction, September 21, 2026: Friday September 18's session now has a confirmed close — the euro recovered some ground from the previous correction's seven-week low, though it still closed the full week down almost 1%. The rest of the article, with the earlier correction (the September 16 close) and all others, remains below as historical context.
VERIFIED EUR/USD closed Friday's September 18, 2026 session near $1.1486, up 0.21% from the September 16 close, though still down almost 1% for the week as a whole after the Federal Reserve's rate hike, according to Exchange Rates UK.
HYPOTHESIS Several outlets attribute the stabilization to the Fed's rate hike already being largely priced in; ING analysts warned the pair could test the 1.1400 level in coming sessions if short-term US yield strength persists. This is the reading circulating that week, not a fact independently verified by this site, according to the same source.
What was behind the September 16 drop, after the Fed's rate hike (earlier correction)
VERIFIED EUR/USD closed the September 16, 2026 session near $1.1462, down 0.65% on the day and its lowest level in seven weeks, after the Federal Reserve's first rate hike since 2023, according to Exchange Rates UK.
HYPOTHESIS Several outlets attribute the deeper decline to 16 of the Fed's 18 policymakers signalling they expect at least one more rate hike before year-end, a tougher-than-expected message that reinforced the dollar against the euro. This is the reading circulating that evening, not a fact independently verified by this site, according to the same source.
What was behind the September 16 rate hike (earlier correction)
VERIFIED The Federal Reserve's Federal Open Market Committee (FOMC) raised its benchmark interest rate by 25 basis points on September 16, 2026, to a target range of 3.75%-4.00%, in a unanimous 12-0 vote — the first rate hike since July 2023, under Chair Kevin Warsh. The median projection among FOMC members themselves (the “dot plot”) points to another 25-basis-point hike before year-end, according to Fox Business.
HYPOTHESIS The dollar held firm near two-week highs against the euro in the hours before the announcement, with the rate hike already almost fully priced in by the market; several outlets said attention had shifted to the tone of the “dot plot” and Warsh's comments on inflation, with a harder-edged message tending to favor the dollar over the euro. This is the reading circulating that afternoon, not a fact independently verified by this site, according to FXStreet.
CALCULATED Between the August 25 rate ($1.1655) and the September 18 close ($1.1486), EUR/USD shows a cumulative change of −1.45% — (1.1486 − 1.1655) / 1.1655 × 100. This is Claromercado's own calculation based on two figures already verified and dated in this article, not a figure published as such by any source.
Recent move history
The drivers cited in this history are market narratives attributed to the sources indicated in each case, not facts independently verified by this site.
- September 14 — traded around $1.1525, its lowest level since August 13 (−0.55% on the session); attributed to CME Group's FedWatch raising to 86% the probability of a Fed rate hike at the September 15-16 meeting (from 59.4% a week earlier), after a US August CPI that accelerated to 0.4% month-over-month. FXStreet.
- September 10 — the ECB raised its three key rates by 25 basis points (deposit rate 2.50%, main refinancing rate 2.65%, marginal lending rate 2.90%); EUR/USD briefly dipped below $1.1600 and steadied near $1.1610; attributed to euro-area inflation of 3.3% (a three-year high, driven by the war in the Middle East), with the hike already almost fully priced in by the market. Bloomberg, EBC Financial Group.
- September 3 — traded at $1.1609 (+0.18%); attributed to a higher-than-expected eurozone inflation reading, which led markets to price in almost a 100% probability of an ECB rate hike that week. Trading Economics.
- September 2 — traded below $1.1600, its lowest level in two weeks; attributed to remarks from Fed Chair Kevin Warsh, which led markets to price in roughly a 70% chance of a September rate hike. FXStreet.
- August 25 — traded at $1.1655, correcting from its 2026 high of $1.1915; attributed to expectations that the ECB would raise rates to 2.5% in September and to market unease over the U.S. Treasury's plan to expand long-term debt buybacks. RoboForex, Trading Economics.
Synthesis of the period
Between August 25 and September 18, 2026, the euro went from trading near $1.17 to seven-week lows below $1.15, with an ECB rate hike on September 10 and a Fed hike on September 16 in the middle of the period. The pair moved from $1.1655 to $1.1486 over that span — the cumulative −1.45% change calculated above.
HYPOTHESIS The outlets cited in the history repeatedly attribute the euro's weakening to the combination of high euro-area inflation (which forced the ECB's rate hike) and a Federal Reserve that ended up hiking rates as well, strengthening the dollar. These are readings attributed to the sources already cited for each session, not a causal relationship independently verified by this site.
What this does not mean
HYPOTHESIS A short-term technical correction does not confirm a trend change. The pair has already moved between $1.14 and $1.19 several times throughout 2026, and a couple of days up or down is not the same thing as a multi-month trend.
Sources for the seventh correction, September 21, 2026: Exchange Rates UK: Euro To Dollar Forecast: EUR/USD Lost 1% Last Week, Further Losses Ahead?. Sources for the sixth correction, September 16, 2026: Exchange Rates UK: EUR/USD Falls Below 1.15 As Fed Hikes. Sources for the fifth correction, September 16, 2026: Fox Business: Fed hikes interest rates for first time since 2023, FXStreet: Euro trades cautiously against US Dollar ahead of expected Fed rate hike. Sources for the condensed history (September 14 → August 25, 2026): FXStreet: Euro tumbles to one-month low as Fed rate hike bets dominate, Bloomberg: ECB lifts rates for second time as Iran war drives inflation, EBC Financial Group: ECB rate hike, EUR/USD, September 2026, Trading Economics: Euro Area Currency, FXStreet: Forex News, RoboForex: EUR/USD forecast and analysis, 25 August 2026, Trading Economics: Euro Holds Firm on ECB Hawkishness.
Educational notice: this article is analysis based on public data, may be wrong, and is not financial advice. It is not a buy or sell recommendation. The decision and the risk are always the reader's own.