Euro hits 17-month low, dollar near pre-Liberation Day highs
SPY•The euro fell to $1.1161, its weakest level since May 2025, as concerns about France’s budget and bond-market selloff pressured the currency. The dollar index rose to 102.53, its highest since April 10, 2025.
1. Euro under pressure
The euro fell to a 17-month low against the dollar on Monday as concerns about France’s ability to rein in its budget deficit and last week’s bond-market selloff stoked fears of renewed euro zone sovereign debt stress. It was last down 0.47% at $1.12, after touching $1.1161, its weakest since May 2025.
2. French debt concerns
The yield gap between French government bonds and German Bunds reached about 150 basis points on Friday, its widest since the 2011 euro zone sovereign debt crisis, before retreating to 140 basis points. It was last up 5 basis points at 145.50. Commerzbank strategist Hauke Siemssen said recent bond-market dynamics were “increasingly concerning” and “somewhat reminiscent of a sovereign debt crisis.”
3. Dollar and yen moves
The dollar index rose 0.30% to 102.23 after reaching 102.53, its highest since April 10, 2025. Traders priced an 80% chance of the Federal Reserve holding rates steady in October, up from 36% a week earlier. The yen was roughly unchanged at 157.92 per dollar, supported by expectations of tighter Japanese policy and government warnings against depreciation.
