Euro Faces Political, Fiscal Reckoning as It Hovers Near 17-Month Low
Investor worries over France’s fiscal outlook and rising bond yields pushed the euro lower as the French-German spread hit its widest level since the debt crisis.
- On Tuesday, the euro struggled near a 17-month low, weighed down by political uncertainty and fiscal concerns across the eurozone as the dollar extended its blistering rally.
- France's national debt has increased by over $1 trillion since President Emmanuel Macron took office in 2017, driven by climbing public spending and deep tax cuts.
- French 10-year government bond yields rose to 5% last week, with the spread against German debt reaching its widest level since the eurozone crisis as investors positioned for higher fiscal risk.
- The European Central Bank faces pressure to intervene, though Ricardo Amaro, lead eurozone economist with Oxford Economics, warned that "sounding too hawkish would also add to pressure on France's bond yields."
- Ahead of the 2027 presidential election, the right-wing National Rally remains well-placed with Marine Le Pen likely to be the lead candidate, raising investor concerns over France's future economic direction.
13 Articles
13 Articles
French government bond yields have been at the highest level since 2002. The country has no force for urgent reforms. Nevertheless, it is vital that the ECB refrains from intervention.
Euro faces political, fiscal reckoning as it hovers near 17-month low
By Rae Wee SINGAPORE, Oct 6 (Reuters) - The euro struggled near a 17-month low on Tuesday, weighed down by political uncertainty and fiscal concerns across the euro zone, while the dollar extended its blistering rally as it rode US Treasury yields hig...
Euro plummets against US dollar: has the next crisis begun?
The euro has fallen to a 17-month low against the dollar. That will make inflation worse in the EU, where political worries and concern over French debt are already troubling investors. Is a fiscal crisis at hand?
The European single currency has fallen to the lowest level in 17 months. This evokes memories of the euro crisis, as sovereign debt is once again seen as a trigger.
France has drifted to a dangerous border, the whole of Europe may feel the consequences - The sale of benchmark bonds was fueled by several factors.
The yield of the French decade rises to 4.9%, close to the maximum for 24 years, and the euro drops to 1,1161 dollars. Lecornu's budget 2027 does not convince investors, who also sell Italian, Belgian and Greek securities.
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