Euro slides as French fiscal worries grip markets
TLT•The euro fell to a 17-month low of $1.1161 as French fiscal concerns and a bond selloff weighed on the currency. The dollar index rose 0.47% to 102.37, while traders priced a 78% chance the Fed would hold rates steady in October.
1. Euro falls, dollar gains
The euro weakened sharply as French debt concerns and political gridlock fears stoked worries about regional contagion. It touched $1.1161, its weakest level since May 2025, and was last down 0.67% at $1.1178; it also fell against the Swiss franc and sterling. The dollar index rose 0.47% to 102.37, supported by higher Treasury yields and safe-haven demand.
2. Rate expectations shift
A bond selloff last week pushed global borrowing costs to multi-decade highs and weighed on French debt. The US 10-year Treasury yield was at 5.262%. After September job growth slowed more than expected, traders priced a 78% chance the Fed would hold rates steady in October, up from 36% a week earlier; they still expected a hike in December and two more in the first half of 2027.
