Euro Slumps Against Dollar as France's Fiscal Future Weighs Heavily
The euro is poised for its biggest weekly decline in months against the dollar as concerns over France's fiscal trajectory and the Federal Reserve's hawkish shift weigh on sentiment.
Despite a slight gain on Friday, the single currency is still tracking a 1.17% weekly fall, the largest since early June. Oil prices dropped on Friday amid mixed supply signals, which typically supports the dollar as investors reduce exposure to currencies of major energy importers like the euro and yen.
The dollar index rose 0.85% this week, its third consecutive weekly increase, a trend last seen in May 2025. The US central bank raised rates and signaled more hikes in mid-September, leading markets to bet on further tightening.
Experts warn that France's budget and political backdrop have weighed heavily on the euro. Jane Foley, senior forex strategist at Rabobank, noted that 'the outlook for the euro is clearly on a weakened footing relative to last year.'