Traders turn most bearish on euro since March as currency hits 17-month low

Summary

On October 1, 2026, traders significantly increased their bearish outlook on the euro, as the currency fell to its lowest value in 17 months, trading at nearly $1.1242. This shift was marked by a surge in options purchased to hedge against further declines, with three-month euro risk reversals dropping to their lowest level since March. Elevated oil prices and rising US Treasury yields, coupled with concerns over European fiscal risks, have contributed to the euro's struggles, as noted by analysts. Additionally, US Energy Secretary Chris Wright expressed confidence that Europe could mitigate soaring global fuel prices by tapping into emergency diesel inventories, highlighting the interconnectedness of energy markets and currency valuations.

Analysis