Euro drops to 17-month low on France debt concerns
TLT•The euro fell as much as 0.8% to $1.116, its weakest since May 2025, amid concerns about France’s budget deficit and euro zone debt risks. US services prices paid rose to 74.0 in September from 72.6 in August, supporting the dollar.
1. Euro pressured by France concerns
The euro fell to a 17-month low against the dollar as concerns about France’s ability to rein in its budget deficit and last week’s bond selloff raised fears of a potential euro zone sovereign debt crisis. It was down 0.36% at $1.1211 after reaching $1.116, and had declined for four straight weeks, losing 3.1% over that period.
2. Bond spreads and US data
The gap between French and German bond yields widened to nearly 160 basis points on Friday, its largest since the euro zone sovereign debt crisis in 2011, before narrowing to 136 basis points on Monday. US services prices paid rose to 74.0 in September from 72.6 in August, while the services PMI eased to 54.9 from 55.4.
3. Dollar and yen moves
The dollar index rose 0.28% to 102.19. Japan's Prime Minister Sanae Takaichi pledged to “control” bond issuance and act swiftly against market turbulence; the dollar strengthened 0.12% against the yen to 158.04.
