# Dollar Holds Firm Amid French Fiscal Woes

> Dollar stays strong as French fiscal issues weaken euro.
- Title: Dollar Holds Firm Amid French Fiscal Woes · The Economic Times
- Summary: Dollar stays strong as French fiscal issues weaken euro. The dollar held firm near a 17-month high as French fiscal worries and soft US jobs data reduced…
- Keywords: dollar, euro, french fiscal woes, us jobs data, treasury yields, fed rate hikes, central bank, market volatility, money, business, Holds, Firm
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/forex/forex-news/dollar-holds-firm-as-french-fiscal-woes-keep-euro-on-back-foot/articleshow/134683809.cms
- Author: Reuters
- Published: 2026-10-05T01:59:00+00:00
- Read time: 1 min
- Topics: dollar, euro, french fiscal woes, us jobs data, treasury yields, fed rate hikes, central bank, market volatility, money, business
## Dollar Starts Strong
The dollar began the week near a 17-month high on Monday as traders weighed receding odds of a Federal Reserve rate hike after soft US jobs data.
## Euro Weakens
The euro fell to $1.1246, stuck near its lowest level since May 2025 after four consecutive weekly declines due to France's debt levels and political gridlock concerns.
## Sterling and Yen Rates
Sterling fetched $1.3241, while the Japanese yen bought 157.69 per US dollar in early Asian hours.
## Dollar Index Strength
The dollar index, measuring the US currency against six major units, rose to 101.97 as markets reeled from last week's bond rout.
## Treasury Yields Drop
US 10-year Treasury yields fell to 5.262%, below the 24-year high it touched last week that rattled markets.
## Market Strategy Insight
Matthew Ryan, head of market strategy at Ebury, noted the dollar is the main winner as rising Treasury yields boost US assets and global debt selloff fuels safe-haven flows into the greenback.

> The dollar is the main winner in the current environment as not only is the rise in Treasury yields boosting the appeal of US assets, but the broad selloff in debt globally is fuelling safe-haven flows into the greenback
## Fed Rate Expectations
Traders now price a 78% chance of the US central bank holding rates steady in October, down from 36% a week earlier, with expectations of hikes in December and two more in early 2027.
## Analyst Outlook
Jefferies strategist Mohit Kumar expects one Fed and one European Central Bank rate hike by March, with slower growth if oil prices remain high.

> By the time we come to March, either oil prices would be lower or if we are wrong and oil prices are elevated, we are talking slower growth
## Key takeaway

The dollar held firm near a 17-month high as French fiscal worries and soft US jobs data reduced euro strength.