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The euro is sliding toward multi-month lows as soaring energy prices and Middle East tensions pile pressure on the single currency.

The euro fell to its lowest level against the dollar since November and looks vulnerable to further declines.

Euro-dollar reached 1.1507 in Monday trade, a level last seen on November 25, and from here the big 1.14 low of July 2025 comes into sight.

Momentum is firmly against the euro at this juncture as traders see the Eurozone as being particularly vulnerable to another oil and gas shock.

"Broad USD continues to strengthen, and EUR/USD is nearing 1.15 this morning as oil prices spiked further over the weekend," says a morning note from Danske Bank.

European gas prices gained as much as 30% to reach €69.50 per megawatt hour when trading opened on Monday. Prices have more than doubled since the crisis began.

The Strait of Hormuz remains closed, and Iranian attacks on neighbouring energy infrastructure confirm surging oil prices are very much a tactical aim of its battle against the U.S. and Israel.

"Far from calming down over the weekend, events in the Middle East only point to a broadening economic shock as oil spikes through $100/barrel," says Chris Turner, head FX analyst at ING.

Just this morning, Bahrain Petroleum Company declared force majeure on its group operations following an attack on its refinery complex early on Monday.

What became clear over the weekend is that there's not sign of an offramp, and U.S. President Donald Trump said on Sunday night that he sees the "short term" spike in oil prices as a price worth paying to overcome the Iranian regime and secure a lasting peace.

Of course, markets aren't so sure this is how it will pan out and stocks are selling off across the board.

The rising cost of dollar-denominated energy, combined with the liquidation of equity holdings, typically benefits the dollar and underpins the currency's enduring 'safe haven' qualities in times of true stress.

For euro-dollar, the outlook is firmly tilted lower as investors start to retreat from a previously held assumption that the Middle East conflict would be short-lived; the longer it continues, the harder it becomes to justify current equity levels.

"Big support just below 1.1500 in EUR/USD remains vulnerable. The longer energy prices stay high, the greater the damage to the 2026 narrative of synchronised global growth and Europe playing catch-up with US exceptionalism," says ING's Turner.