The euro has fallen to its weakest level since May 2025, with EUR/USD sliding to a 17-month low near 1.1161 as investors grow increasingly concerned about France’s debt trajectory and political outlook. The pair has now recorded four consecutive weekly declines and is on course for a fifth if the current pressure persists.
France is at the center of the stress: its budget deficit is expected to remain near 5% of GDP next year, the country is already under an EU excessive deficit procedure, and the premium investors demand to hold French government bonds over German Bunds has widened sharply. The French-German 10-year yield spread recently touched 150 basis points on Friday before ending last week near 140 basis points, after its largest weekly increase in 17 years.
Political uncertainty ahead of France’s 2027 presidential election is adding to doubts that meaningful fiscal repair can be achieved quickly. The European Central Bank’s Transmission Protection Instrument is seen as having limited room to intervene because the move in French borrowing costs is being driven by genuine fiscal concerns rather than disorderly market stress.
On the other side of the pair, U.S. Treasury yields remain elevated, keeping dollar demand firm. The U.S. Dollar Index climbed 0.47% to 102.37, while the U.S. 10-year yield stood at 5.26%. Fed funds pricing showed a 79.5% chance the Federal Reserve leaves rates unchanged in October, up from 36% a week earlier.
Against this backdrop, Bitcoin held near $86,463, less than 1.1% below its September high of $87,378. The resilience comes despite a stronger dollar and safe-haven flows, keeping BTC near late-September resistance as traders assess whether macro pressure will eventually weigh on crypto or whether Bitcoin can decouple.
EUR/USD technicals remain bearish, with price around 1.1186, well below the 200-day moving average near 1.1553. The RSI near 27 signals oversold conditions, which could allow a short-term bounce toward 1.1250-1.1300, but the broader structure still favors sellers. A clean break of 1.1150 would open the path toward the 1.10 psychological level.
