Euro touches 17-month low as French debt worries mount

The euro fell to its weakest level against the U.S. dollar since May 2025 on Monday, touching $1.1161 during Asian trading as investor concerns about French public finances and a broad bond-market selloff weighed on the currency. It later recovered slightly in some reports, though the precise subsequent rate varied. The euro’s decline followed four consecutive weekly losses. Market reports linked pressure on the currency to rising borrowing costs and uncertainty over France’s ability to rein in its budget deficit, alongside demand for the dollar as a relatively safe asset. Higher U.S. Treasury yields have also supported the dollar, while weaker-than-expected U.S. employment data reduced expectations for a Federal Reserve rate increase in October. French government debt was a focus of the bond selloff. The gap between French and German 10-year borrowing costs was reported at roughly 140 to 152 basis points around Friday and Monday. Reports described the Friday spread as its widest since 2011, though readings differed by timing. French borrowing costs have risen amid concern about the country’s fiscal outlook and political uncertainty ahead of its 2027 presidential election.