From The Economic Times · Anupam Nagar · · 1m 30s
Euro Hits 17-Month Low as French Fiscal Worries Boost Dollar
Euro drops to 17-month low amid French fiscal fears and dollar strength.
In brief
Euro drops to 17-month low amid French fiscal fears and dollar strength. The euro fell to a 17-month low of $1.1161 as concerns over France's fiscal position and bond market selloff boosted the dollar. Originally reported by The Economic Times.
Euro Falls to 17-Month Low
The euro dropped to $1.1161, its weakest level since May 2025, after four consecutive weekly declines.
French Fiscal Concerns Drive Euro Weakness
Concerns over France's debt burden and political gridlock ahead of next year's election weighed on the single currency.
Dollar Strengthens Amid Global Selloff
The dollar index rose 0.47% to 102.37 as rising Treasury yields increased the appeal of U.S. assets.
French Bond Market Selloff
French government debt was particularly hard hit as investors assessed the inflationary impact of surging oil prices.
US Jobs Data Slows Rate Hike Bets
Weaker-than-expected U.S. jobs data reduced expectations for near-term Fed tightening, with traders pricing a 78% probability of no rate change in October.
Fed Rate Path Uncertain
Analysts question whether current market pricing is too aggressive, with Bank of Singapore chief Mansoor Mohi-uddin expecting the Fed to leave rates unchanged this month.
Diverging Monetary Policy Outlook
The diverging outlook for monetary policy, combined with elevated bond-market volatility, is likely to keep currency markets volatile in the near term.
What Happens Next
Elevated rate volatility could continue to weigh on carry trades, cyclical currencies, and the euro, while the dollar and Swiss franc remain supported.
The main idea
The euro fell to a 17-month low of $1.1161 as concerns over France's fiscal position and bond market selloff boosted the dollar.
