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Euro falls to 17-month low as French fiscal and political worries weigh
Версия 2: A fuller account from Huxiu adds analyst and bank estimates on further euro weakness, comparisons of French and Italian bond spreads with past crises, France's 2027 budget and split parliament, and other eurozone election developments, while Yicai carried the story as a headline only.
Коротко
The euro fell to a 17-month low against the dollar on 5 October, touching 1.1161 per dollar, its lowest since May 2025, according to CLS, Jiemian and Huxiu. The outlets linked the slide to concern over France's fiscal position and political uncertainty, with French government bond yields under pressure and the 10-year spread over German bunds briefly exceeding 150 basis points last week, the first time since late 2011. 36Kr, citing Sina Finance, put the euro at 1.12 in early Monday trading, down 0.6%, and also cited high energy prices.
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The euro fell to a 17-month low against the dollar on 5 October, touching 1.1161 per dollar, its weakest since May 2025, according to CLS, Jiemian and Huxiu. CLS and Jiemian said the currency had already declined for four consecutive weeks. 36Kr, citing Sina Finance, reported the euro down 0.6% at 1.12 in early Monday trading and said it was down 4.8% for the year and more than 1.6% since the start of last week. Huxiu said the euro also weakened sharply against sterling, the Swiss franc and the yen. [ 1 , 3 , 4 , 6 ]
The outlets linked the slide to concern over France's fiscal position and political uncertainty. French government bonds have come under pressure: CLS and Jiemian said the spread between French 10-year yields and comparable German bunds briefly exceeded 150 basis points last week, the first time since late 2011. Huxiu said the premium investors demand to hold French debt over German debt rose to its highest level since the 2010-2012 eurozone debt crisis, and that the Italian-German spread briefly neared 130 basis points, the largest weekly rise since the pandemic. [ 1 , 3 , 6 ]
Huxiu reported that the French government is pushing a 2027 budget to cut the fiscal deficit and control debt, but that parliament is deeply split and political camps are positioning for next year's presidential election. It said investors were selling French bonds and buying German ones, and that the foreign-exchange market worries the pressure could spread to other eurozone countries. [ 6 ]
Huxiu also cited other eurozone political developments: it said German Chancellor Merz's party suffered its worst post-war defeat in local elections, Spanish Prime Minister Sánchez announced a snap election and Italy is due to hold elections next year. It added that surging energy prices are pushing up inflation while rising bond yields increase borrowing costs. [ 6 ]
Analysts cited by Huxiu warned the pressure could spread. SocGen chief FX strategist Kit Juckes said the bond selloff triggered broader volatility, with the euro sold off and the momentum intensifying. Bank of America estimated that each 10-basis-point widening of the French-German spread could push the euro down about 0.4%, while Goldman Sachs said the spread's effect on the currency is significant in periods of severe market stress, Huxiu reported. Huxiu said analysts expect the euro could test 1.10, and that Eurizon SLJ chief executive Stephen Jen said it could fall further if fiscal contagion risk is not contained. [ 6 ]
The dollar, meanwhile, was supported by safe-haven demand and high US Treasury yields, CLS reported, with the dollar index rising as much as 0.47% to 102.37. CLS also said weak US jobs data reduced market expectations for the Federal Reserve, though that sentence is truncated in the available text. [ 1 ]
Почему это важно
The documents tie the euro's slide to concern that France's debt level and a possible political deadlock before the next French presidential election could add to fiscal risk across the eurozone. Wider French bond spreads and a weaker euro indicate stress being priced into euro-area assets, while safe-haven demand and high US Treasury yields support the dollar. The documents do not quantify the wider economic impact.
Ключевые факты
- The euro touched 1.1161 per dollar on 5 October, its lowest level since May 2025, according to CLS, Jiemian and Huxiu. [ 1 , 3 , 6 ]
- The euro had already declined for four consecutive weeks before the 5 October move, CLS and Jiemian reported. [ 1 , 3 ]
- The spread between French 10-year government bond yields and comparable German bunds briefly exceeded 150 basis points last week, the first time since the end of 2011, according to CLS and Jiemian. [ 1 , 3 ]
- Huxiu reported that France's government is pushing a 2027 budget to cut the deficit and control debt, that parliament is deeply split and that political camps are positioning for next year's presidential election. [ 6 ]
- CLS said the dollar index rose as much as 0.47% to 102.37 on 5 October, supported by safe-haven demand and high US Treasury yields. [ 1 ]
- 36Kr, citing Sina Finance, said the euro fell 0.6% to 1.12 in early Monday trading, was down 4.8% for the year and had lost more than 1.6% since the start of last week. [ 4 ]
- Huxiu said the euro also weakened sharply against sterling, the Swiss franc and the yen, and that analysts expect it could test 1.10. [ 6 ]
Подтверждено несколькими источниками
- The euro fell to a 17-month low against the dollar on 5 October. [ 1 , 2 , 3 , 4 , 6 ]
- The euro's decline was linked to concerns about France's fiscal position and political uncertainty. [ 1 , 3 , 6 ]
- French government bonds have come under pressure and the yield premium over German bunds has widened. [ 1 , 3 , 6 ]
Пока неясно
- The exact level the euro reached during the session. CLS, Jiemian and Huxiu report an intraday low of 1.1161 per dollar, while 36Kr, citing Sina Finance, reports 1.12 in early Monday trading; the documents do not reconcile the two figures.
- What drove the euro lower. CLS, Jiemian and Huxiu emphasise French fiscal and political uncertainty, while 36Kr, citing Sina Finance, also cites high energy prices; the documents do not settle on a single cause.
- How the French-German bond spread compares with past episodes. CLS and Jiemian say the spread briefly exceeded 150 basis points for the first time since late 2011, while Huxiu describes it as the highest since 2012 and the 2010-2012 debt crisis; the accounts differ.
- The full content of Xinhua's report. Only the headline was available, with no article or summary text.
- The reported effect of weak US jobs data on expectations for the Federal Reserve. The relevant sentence in the CLS summary is truncated.
- The euro's 4.8% year-to-date decline. This figure appears only in 36Kr, which attributes it to Sina Finance, and is not carried by the other outlets.
- Other eurozone political developments cited as background. Huxiu alone reports that German Chancellor Merz's party suffered its worst post-war defeat in local elections, that Spanish Prime Minister Sánchez announced a snap election and that Italy holds elections next year.
- Analyst comments and bank estimates on the euro. The quotes from SocGen's Kit Juckes, the Bank of America and Goldman Sachs estimates and the remarks by Eurizon SLJ's Stephen Jen appear only in Huxiu.
Что пишут местные СМИ
Хронология, местное время
- CLS reports the euro fell as low as 1.1161 per dollar, its weakest since May 2025, and that the French 10-year spread over German bunds briefly exceeded 150 basis points last week. [ 1 ]
- Xinhua publishes a headline saying the euro fell to a 17-month low. [ 2 ]
- Jiemian publishes its account of the euro's slide, citing Xinhua. [ 3 ]
- 36Kr, citing Sina Finance, reports the euro down 0.6% at 1.12 in early Monday trading. [ 4 ]
- Yicai publishes a headline on the euro's 17-month low. [ 5 ]
- Huxiu publishes its fuller account, including analyst commentary, French budget politics and other eurozone election context. [ 6 ]