The euro weakened to $1.144 on Thursday as investors digested fresh economic data, escalating Middle East tensions, and uncertainty over the US interest rate outlook following a divided Federal Reserve decision.
Spain's annual EU-harmonized inflation rate accelerated more than expected to 3.8% in July, the highest since May 2024 and well above the European Central Bank's 2% target.
Meanwhile, France's economy grew 0.2% in the second quarter, rebounding from the previous quarter's contraction, while growth in Spain and the Netherlands accelerated to 0.7% and 0.4%, respectively, both exceeding forecasts.
Meanwhile, renewed US airstrikes on Iran in response to attacks on American forces across the Middle East lifted oil prices and weighed on risk sentiment.
The Federal Reserve also added to uncertainty on Wednesday by leaving interest rates unchanged, despite three FOMC members dissenting in favor of a rate hike.