Euro falls to 19-month low amid fiscal

The euro fell 0.6% against the US dollar to $1.1164 on Monday (October 5), its lowest level since March 2025, amid concerns over Europe’s public finances and political uncertainty.

The decline was driven mainly by growing concerns over France’s fiscal situation and fears that economic pressure could spread to other highly indebted eurozone countries, according to Anadolu.

The euro came under further pressure after sharp swings in French government bond prices last Friday. The yield gap between 10-year French and German government bonds widened to 159 basis points at one point before narrowing to around 141 basis points at market close.

The yield on France’s 10-year government bonds temporarily reached nearly 5%, signalling increased investor demands for compensation for the risks of holding French government debt.

Concerns have also grown over France’s fiscal position and political uncertainty ahead of the 2027 presidential election, raising fears that economic pressures could spread across the eurozone.