Dollar Nears 17-Month Peak as Euro Struggles with French Debt Fears

The US dollar has surged to its highest level in 17 months, fueled by shifting expectations around Federal Reserve policy and mounting financial worries in Europe. The euro, in particular, faced renewed pressure, dropping to $1.1246 and nearing its lowest point since May 2025. This decline marks the fourth straight week of losses for the single currency, as concerns over French debt and political uncertainty ahead of next year’s elections weigh heavily on investor sentiment.

Meanwhile, the British pound reached $1.3241, while the Japanese yen traded at 157.69 per dollar in early Asian trading. The dollar index, which tracks the US currency against six major peers, steadied at 101.97. These movements come as markets continue to digest last week’s global bond sell-off, which pushed borrowing costs to multi-decade highs and intensified fears over inflation, especially with rising oil prices.

The yield on 10-year US Treasury bonds eased slightly to 5.262 percent, down from last week’s 24-year peak. Other currencies also saw shifts, with the Swiss franc trading at 0.8286 against the dollar and 0.9312 against the euro after a sharp rise last week. The Australian dollar held steady at $0.6956, while the New Zealand dollar dipped 0.1 percent to $0.5610.