Euro Tumbles to Two-Month Low Amid Energy Costs and Political Risks

The euro has slid to its lowest level in two months due to high energy prices and political uncertainty across major European economies.

In August, the currency approached $1.20, but now faces a difficult mix of energy-market strain and political risk.

The euro traded at around $1.137 on September 29, close to its yearly low, after falling by about 2% in September.

Currency strategists at Bank of America warn that every further 10-basis-point widening in the spread between French and German government bonds is associated with a potential 0.4% decline in the euro against the dollar.