Euro falls to 17-month low as French bond jitters lift dollar

The euro has dropped to its weakest level since May 2025, pressured by French fiscal concerns and a global bond selloff that strengthened the dollar.

• The euro fell to 1.1161 dollars on Monday, its lowest since May 2025, before trimming losses to 1.1178, down 0.67%.
• The dollar index rose 0.47% to 102.37 points, while the yield on the US 10-year Treasury reached 5.262%.
• Brent Donnelly of Spectra Markets said French budget promises lack credibility with a change of government approaching.
• CME Group's FedWatch tool showed traders pricing a 78% probability the Federal Reserve holds rates in October, up from 36% a week earlier.
• Spain's Prime Minister Pedro Sánchez announced a snap election, heightening eurozone political uncertainty amid the currency's slide.
• Analysts warned that stress in French bond markets could spread to other euro-area countries, reviving fears of a sovereign debt crisis.
• The yield spread between French and German benchmark bonds widened to 152 basis points on Friday, the highest since 2011.
• Several Spanish ministers and senior Socialist Party officials reportedly support early elections after a parliamentary defeat last week.