The euro exchange rate slipped against the dollar on October 29, 2026, after the European Central Bank held interest rates steady and warned that rising energy prices posed risks to inflation.

Euro exchange rate and bond yields ease

The euro was last down 0.4% at $1.1107, extending an earlier decline that took it to its lowest level since May 2025. Against the British pound, it stood at 83.48 pence after reaching an 18-month low just before the rate decision.

Germany’s benchmark 10-year bond yield was down 4 basis points at 3.34%, while the yield on the rate-sensitive Schatz was down 5 basis points at 3.049%. Both were slightly lower than before the decision. The STOXX 600 index was up 1%.

ECB warns of energy-price risks

The ECB’s monetary policy decision kept the deposit facility rate at 2.50%, the main refinancing rate at 2.65% and the marginal lending rate at 2.90%. The hold was in line with expectations.

The central bank said higher energy prices posed upside risks to inflation and downside risks to growth. It said it would set policy meeting by meeting and was not committing to a particular rate path.

Lagarde press conference in focus

At the time of the market snapshot, investors were awaiting an ECB press conference scheduled for 1345 GMT for further indications on the interest-rate outlook. Earlier on October 29, ECB President Christine Lagarde announced that she would step down on February 7, 2027, ahead of schedule.

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