Euro hits 17-month low amid France fiscal and political worries

The euro weakened to its lowest level in 17 months on Monday, driven by growing concerns over France's deteriorating fiscal situation and political instability. The common currency of the eurozone dropped to 1.1161 U.S. dollars, marking its weakest point since May 2025, as investors fret over France's rising debt and potential political deadlock before next year's presidential election.

French government bonds have faced significant pressure recently, with the yield spread between French and German 10-year bonds briefly exceeding 150 basis points last week, a level not seen since late 2011. This widening gap reflects heightened fiscal risks that could ripple across the broader eurozone.

Meanwhile, the U.S. dollar gained strength due to safe-haven demand and higher U.S. Treasury yields. The dollar index, which tracks the currency against six major peers, climbed as much as 0.47 percent to 102.37 on Monday. However, the dollar's rise was limited by softer-than-expected U.S. employment data, which reduced expectations of near-term Federal Reserve interest rate hikes.

U.S. stocks closed higher on Monday, with artificial intelligence and technology sectors leading the gains. The Dow Jones Industrial Average rose 0.18 percent, the S&P 500 gained 0.66 percent, and the Nasdaq Composite hit a record high, increasing by 1.05 percent. Ten of the 11 primary S&P 500 sectors ended in positive territory, with materials and communication services leading the gains.