Euro set for biggest weekly fall in months vs dollar as France fiscal trajectory weighs
TLT•The euro was on track for a 1.17% weekly fall against the dollar, its steepest since early June, as concerns about France’s fiscal outlook weighed on sentiment. The dollar index was set for a 0.85% weekly gain.
1. Euro faces weekly decline
The euro was set for a fourth straight weekly fall against the dollar, its steepest in around four months, amid concerns about France’s fiscal trajectory and the Federal Reserve’s hawkish shift in mid-September. It rose 0.15% to $1.126 on Friday as oil prices dropped, but remained on track for a 1.17% weekly decline. The dollar index was down 0.15% at 101.90 and headed for a 0.85% weekly gain, its third consecutive rise.
2. French debt concerns grow
French 10-year yields jumped to their highest level since 2002 on Thursday, while the yield gap between French bonds and German Bunds widened to about 150 basis points, its highest since the euro area’s sovereign debt crisis in 2011. Selling pressure also showed signs of spreading to Italian and Greek debt. Investors were also watching the US payroll report, with September job growth expected to slow and the unemployment rate forecast at 4.1% for a third straight month.
