Recent US inflation data, including September CPI at 3.7% year-over-year and core prices rising 0.3% month-over-month, have boosted expectations for additional Federal Reserve rate hikes, with the federal funds rate already at 3.75-4.00%. This contrasts with the ECB's deposit rate at 2.5% after two 2026 hikes, amid Eurozone inflation at 3.8% and energy price surges tied to geopolitical shocks. The resulting yield differential and dollar strength drove EUR/USD to a 17-month low near 1.1113 in mid-October before a partial rebound to around 1.124, pressured further by French fiscal risks. Traders monitor upcoming FOMC and ECB decisions alongside labor and inflation releases for shifts in the implied rate path and currency valuation.