Euro Drops to 17-Month Low Amid France’s Fiscal Crisis

The euro hit a 17-month low against the dollar on Monday, driven by escalating financial concerns in France. The single currency dropped to $1.1161 in Asian trading, marking its lowest point since May 2025. This decline followed four consecutive weeks of losses, fueled by fears over France's rising debt levels and political uncertainty ahead of next year's elections.

The euro's weakness was further exacerbated by turmoil in the bond market, raising fears of a potential contagion across the eurozone, reminiscent of the debt crisis over a decade ago. Analysts are divided on whether the risk of contagion is increasing, with some cautioning that it may be too early to assess the full impact.

Despite weak U.S. employment data, the dollar gained strength as expectations of a near-term rate hike diminished. Ninghui Liu, head of investment strategy and research for the Asia-Pacific region at State Street Investment Management, noted that France's fiscal position is becoming increasingly unstable, though he characterized the current situation as more of a country-specific issue rather than a broader euro crisis.

The National Bank of Ukraine set the dollar exchange rate at UAH 44.9857 and the euro at UAH 50.5333 for October 5, reflecting the latest market movements.