Euro Hits 17-Month Low as Traders Grow Bearish

The euro has hit its weakest level in 17 months after falling nearly 1% to $1.1242, prompting traders to grow increasingly bearish on the currency.

Three-month euro risk reversals have dropped to -1.132, the lowest since March 13, indicating that demand for downside protection is surging.

Implied volatility on three-month euro options has risen to 6.45%, marking its highest level since April 13 and reflecting a surge in hedge demand.

The pressure on European markets intensifies as the euro falls, with bond yields in France and Italy reaching multi-decade highs, while stocks and credit markets struggle.