Euro extends its reversal as rising Oil prices offset upbeat German data

  • EUR/USD gives away Tuesday's gains on Wednesday and drops to session lows at 1.1225 so far.
  • German Industrial Production beat expectations in September, but Brent Oil prices above $100 weigh heavily on the Euro.
  • The US Dollar appreciates against its main peers with all eyes on the minutes of the latest Fed meeting.

The Euro (EUR) heads south against the US Dollar (USD) on Wednesday, giving away Tuesday's gains weighed by rising Oil prices and broad-based US Dollar strength ahead of the release of the minutes of the last Federal Reserve (Fed) meeting. The EUR/USD pair is trading at session lows in the area of 1.1225, down from Tuesday’s highs at 1,1275, and unfazed by the strong German Industrial Production release.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Data from the German official statistics office revealed that the country’s factory output bounced up 2% in September, largely reversing August's 1.2% decline and beating expectations of a 0.5% increment. Year-over-year, Industrial Production increased 2.3%, following a 1.6% contraction in the previous month.

Markets have ignored these figures, as a mild risk-averse mood prevails, with fresh tensions in the Middle East boosting Oil prices again. The price of the Brent Oil barrel has climbed back above $100, levels that pose critical pressure on the Eurozone’s economic growth.

Le Pen’s savings plans thrilled investors on Tuesday

The Euro found some relief on Tuesday as the far-right Marine Le Pen, the best-positioned candidate to win next year’s presidential elections, announced a plan to cut spending. Le Pen vowed to save costs by EUR 140 billion in the next five years, and bring the fiscal deficit to levels below 3% by 2030 from the current 5.1%. The plan thrilled investors. French government bond yields retreated from multi-decade highs and the EUR/USD bounced to the upper range of the 1.1200s from 17-month lows, near 1.1160 on Monday.

The US Dollar, on the other hand, is regaining lost ground against its most peers on Wednesday, as investors brace for the release of the minutes of September’s Federal Open Market Committee (FOMC) meeting due later in the day. The Fed hiked rates by 25 basis points for the first time in three years and hinted at further tightening ahead.

Soft US inflation and labour figures have prompted investors to dial down hopes of another rate hike in October. The overall US economy, however, remains resilient, and inflation is well above the Fed's target, which keeps futures markets hopeful that the bank will hike rates again in December and at least one more time in the first quarter of 2027, according to the CME’s Fed Watch Tool.

Economic Indicator

Industrial Production s.a. (MoM)

The Industrial Production released by the Statistisches Bundesamt Deutschland measures outputs of the German factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. A high reading is seen as positive (or bullish) for the EUR, whereas a low reading is seen as negative (or bearish).

Read more.

Last release: Wed Oct 07, 2026 06:00

Frequency: Monthly

Actual: 2%

Consensus: 0.5%

Previous: -1.1%

Source: Federal Statistics Office of Germany

Economic Indicator

Industrial Production n.s.a. w.d.a. (YoY)

The Industrial Production released by the Statistisches Bundesamt Deutschland measures outputs of the German factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. A high reading is seen as positive (or bullish) for the EUR, whereas a low reading is seen as negative (or bearish).

Read more.

Last release: Wed Oct 07, 2026 06:00

Frequency: Monthly

Actual: 2.3%

Consensus: -

Previous: -1.6%

Source: Federal Statistics Office of Germany