Euro struggles as it faces political, fiscal reckoning
TLT•The euro slipped to $1.1219, near a 17-month low, as French debt concerns and Spain’s upcoming snap election weighed on the currency. The dollar index rose to 102.17, supported by elevated US Treasury yields.
1. Euro under pressure
The euro edged down to $1.1219 in Asia after falling to its lowest level since May 2025 in the previous session. Concerns about high debt and political gridlock in France, along with Spain’s upcoming snap election, weighed on the currency; surging French borrowing costs also raised concerns across the euro area.
2. Dollar gains support
The dollar index firmed at 102.17, after reaching an 18-month high in the previous session, as US Treasury yields remained elevated. Expectations for a Federal Reserve rate hike this month faded after weaker-than-expected US jobs data, though investors still bet on further tightening later.
3. Other currencies and rates
Sterling slipped 0.06% to $1.3216, while the dollar rose 0.18% against the yen to 158.16. The Bank of Japan may signal this month that underlying inflation has roughly reached its 2% target, sources familiar with its thinking said.
