The euro fell below 1.12 dollars this Monday, reaching its lowest level since May 2025. Major currencies gained ground against the euro last week, with the European currency continuing its decline. A strong dollar does not fully explain the broad decline, as the weakness of the euro stems from the euro zone itself. Europe imports most of its energy, priced in dollars, leading to increased demand for the U.S. currency and contributing to inflation, currently at 3.8%. Two immediate causes for the euro's decline have been identified. First, the European Central Bank (ECB) has been cautious in its approach, raising rates twice since June but advocating a "measured response." Investors have reduced expectations of a rate hike in October, with the probability dropping from 60% to 18%, while expectations for December remain at 73%. Second, French debt concerns have intensified, with the yield gap between France and Germany increasing by 0.34 points in five sessions, reaching nearly 1.41 points on Friday. The French budget will be examined by Parliament starting October 13. Three potential exit routes for the euro's weakness remain: cheaper energy, calmed French debt, or a weakened dollar. The third was tested on Friday when the U.S. economy added only 29,000 jobs, without a corresponding decline in the dollar. Winter purchases are now taking place against a backdrop of a persistently weak euro. The euro has breached key thresholds against the dollar, with the 1.13 level falling last week and the annual floor of 1.1216 reached this Monday. The rate dropped as low as 1.116 during Asian trading. The next obstacles are at 1.11 and 1.10. The decline is not limited to the dollar; the euro also weakened against the Swiss franc, British pound, and Canadian dollar. It is currently trading around 0.929 Swiss franc, 0.846 British pound, and 1.5714 Canadian dollars. The UAE dirham, fixed to the dollar since 1997, reflects the euro's decline, with one euro now worth approximately 4.10 dirhams compared to 4.13 on Friday. This has implications for travel and purchases in the UAE. Key economic events this week include the release of the ECB's September meeting minutes on Thursday and the Federal Reserve's September meeting minutes on Wednesday evening. Philip Lane, the ECB's chief economist, will provide the first official comments on the inflation figures from Friday. Additionally, the ISM services report for September is expected on October 5, with a previous reading of 55.4 and a dispersed consensus ranging from 55.1 to 55.7. Oil prices remain a concern, with OPEC+ not adjusting production targets and the Strait of Hormuz remaining closed due to tensions with Iran. The potential for cheaper energy, one of the proposed exit routes for the euro's weakness, does not appear imminent.