Euro Plummets on France Debt Fears While Asian Stocks Rally

The euro fell sharply on Monday, hitting a 17-month low against the U.S. dollar as concerns grew over France's worsening fiscal situation. The common currency dropped more than 0.8% to $1.1161 before recovering slightly to $1.1178. Investors are increasingly worried about France's high debt levels and political uncertainty ahead of next year's presidential election, which has led to a widening gap between French and German bond yields.

Bart Wakabayashi, branch manager at State Street in Tokyo, noted that "real money are selling euro against the dollar very aggressively." The euro's decline provided additional support to the dollar, which rose 0.5% against a basket of currencies to 102.39. Sterling and the yen also weakened, with the former slipping 0.23% to $1.3207 and the latter falling 0.15% to 158.10 per dollar.

Asian stocks, meanwhile, rose as investors reduced expectations of a Federal Reserve rate hike this month. Data showing slower-than-expected U.S. job growth in September and downward revisions for prior months have made another rate hike less likely. Japan's Nikkei climbed 2%, and MSCI's Asia-Pacific index gained 0.9%. However, European stock futures were mixed, with the EUROSTOXX 50 and DAX edging down while the FTSE advanced 0.26%.

In other markets, oil prices declined as rising Middle East crude exports and a release of oil stocks by the G7 nations offset concerns about potential damage to Gulf oil infrastructure. Brent crude futures fell 0.5% to $101.75 per barrel, and U.S. crude slid 0.9% to $90.29. Spot gold also dipped 0.24% to $4,132.33 an ounce.