# Euro Hits 17-Month Low as French Fiscal Worries Boost Dollar

> Euro drops to 17-month low amid French fiscal fears and dollar strength.
- Title: Euro Hits 17-Month Low as French Fiscal Worries Boost Dollar
- Summary: 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…
- Keywords: euro, french fiscal worries, dollar, bond market selloff, france debt, french government bonds, eurozone, us treasury yields, fed rate hikes, central bank, money, business
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/us-stocks/news/global-market-euro-hits-17-month-low-as-french-fiscal-worries-boost-dollar/articleshow/134686281.cms
- Author: Anupam Nagar
- Published: 2026-10-05T04:56:00+00:00
- Read time: 1 min
- Topics: euro, french fiscal worries, dollar, bond market selloff, france debt, french government bonds, eurozone, us treasury yields, fed rate hikes, central bank, money, business
## 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.
## Key takeaway

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.