2026.10.2915:53:32UTC+00Euro Rebounds as Lagarde Signals December Hike

The euro reversed an earlier 0.4% loss, rebounding from its weakest level since May 2025 to trade slightly higher at $1.116 after European Central Bank President Christine Lagarde disclosed that policymakers had discussed a rate hike at today’s meeting and indicated that another increase in December remains likely, with markets assigning more than an 80% probability to such a move. Lagarde also announced she plans to leave the ECB before the end of her term, citing a desire for “greater freedom” to speak on issues beyond monetary policy. While the ECB kept interest rates unchanged and highlighted upside inflation risks stemming from energy prices, Lagarde’s stress on stable underlying inflation and increasingly restrictive financial conditions was interpreted by some economists as relatively dovish. Responding to concerns about France, she underscored that the ECB has the tools to address unwarranted market volatility. At the same time, she noted that bond yields are climbing worldwide and cautioned that highly indebted countries must brace for higher borrowing costs.