Euro Hits 17-Month Low Against US Dollar Amid Eurozone Concerns

The euro hit its lowest level in 17 months against the US dollar on October 6, 2026, driven by concerns over France's budget deficit and a bond market sell-off. The euro fell 0.36% to $1.1211, briefly dropping to $1.116, its lowest point since May 2025. This marks the euro's fourth straight week of declines against the dollar, with a total drop of 3.1%, the longest losing streak since May 2025.

Market fears about France's ability to manage its public finances have intensified ahead of the 2027 elections, raising doubts about fiscal austerity measures. Erik Bregar, Director of Foreign Exchange and Precious Metals Risk Management at Silver Gold Bull in Toronto, noted, "It looks like the market is rejecting this 2027 budget forecast. An election is coming up… With the election approaching, who will vote in favor of fiscal austerity measures?"

Meanwhile, US economic data continues to show persistent inflationary pressures. The Institute for Supply Management reported that the non-manufacturing PMI fell to 54.9 points in September, down from 55.4 points in August. The index measuring business input costs rose sharply to 74 points, up from 72.6 points, indicating increasing cost pressures.

The US dollar strengthened against other currencies as well. The dollar rose 0.12% against the yen to 158.04 yen/USD, despite warnings from Japanese authorities about the yen's depreciation. The British pound fell 0.21% to $1.3213 but gained about 0.2% against the euro.