Euro Hits 17-Month Low on French and Spanish Political Uncertainty

The euro dropped to its lowest level in 17 months during Asian trading on October 5, 2026, driven by growing political concerns in France and Spain. Reports indicated that Spanish government officials are preparing for an early election, while France’s bond market faces instability. These factors, combined with a strengthening dollar, have put significant pressure on the euro.

The dollar’s rise is fueled by expectations that the Federal Reserve will raise interest rates three more times by July 2027 to combat inflation. Bloomberg MLIV’s Mark Cranfield highlighted these developments, noting the broader impact on global currency markets.