The euro nears a 17-month low as French fiscal strain and energy costs mount
The euro has fallen to its weakest level against the US dollar since May 2025, as French budget deadlock, political uncertainty and higher energy costs weigh on the currency. Euronews reports that speculative traders’ record bets against the euro total about €38 billion; Reuters quotes Commonwealth Bank of Australia strategist Joseph Capurso predicting it could fall below €0.94 per dollar. A weaker euro raises the cost of dollar-priced imports for European households and businesses.
Bottom line — A French budget deal, calmer bond markets or lower energy prices could ease pressure, but the euro’s recovery depends on more than traders closing short bets.
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Euronews says the euro fell as low as $1.116 (€0.90) earlier in the week; Reuters reported it at $1.1220 (€0.89) on Tuesday.
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According to Euronews, the Dutch TTF gas benchmark was about €73 per megawatt-hour, around 120% above a year earlier, while European gas reserves were 71.5% full on 2 October.
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Eurozone inflation rose to 3.8% in September from 3.2% in August, Euronews reports; energy prices were up 18.8% year on year.
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Euronews says the gap between French and German 10-year borrowing costs exceeded 1.4 percentage points, its widest since the eurozone debt crisis of 2011–12.
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France’s proposed 2027 budget includes €43 billion in savings but lacks majority support, according to Euronews.
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Euronews reports markets now price in about two and a half further ECB rate rises, down from roughly three and a half at the end of September.
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Reuters says Spain’s snap general election, called by Prime Minister Pedro Sánchez, is scheduled for 29 November.
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ING strategist Francesco Pesole told Euronews that EUR/USD could test $1.110 (€0.90) or $1.100 (€0.91) if French bond-market stress intensifies; Reuters quoted Joseph Capurso forecasting a fall below $1.10 (€0.91).