EUR/USD Plunges to 15-Month Low on France Fiscal Concerns

The EUR/USD pair has dropped to a 15-month low due to rising Treasury yields and concerns over France's upcoming budget. The French government is set to unveil a €54 billion fiscal consolidation plan, but market participants are skeptical about its impact.

France's 10-year OAT yield surged 4.9% on Thursday to its highest level since June 2002, while the spread over German bonds has widened to 127 basis points. This is partly driven by France's debt burden exceeding 120% of GDP next year and political uncertainty ahead of April's elections.

Despite stronger-than-expected eurozone manufacturing PMI data, which showed factory growth accelerating to its fastest pace in more than four years, the EUR/USD pair remains under pressure. The U.S. dollar is rising on safe-haven flows amid risk-off trade in Europe and elevated Treasury yields.