FX.co ★ Euro Weakens Amid French Fiscal Concerns

The euro traded under sustained pressure around $1.122, as rising French borrowing costs and escalating tensions between the US and Europe over Russia’s war in Ukraine weighed on sentiment. France’s 10‑year OAT yield climbed above 5%, its highest level since 2002, underscoring growing concerns over the country’s public finances and social unrest. At the same time, relations between Washington and its European allies have deteriorated as US President Donald Trump intensifies his engagement with Russian President Vladimir Putin. Recent steps — including the easing of sanctions on Moscow and public questioning of Ukraine’s political leadership — have amplified uncertainty over Western cohesion and the durability of support for Kyiv.

In parallel, rising oil prices amid the ongoing war in Iran have stoked inflation worries and reinforced expectations of tighter monetary policy, further darkening the growth outlook for Europe. Political uncertainty ahead of key elections across major European economies has added another layer of pressure on the single currency.