The euro dropped to a 17-month low on Monday, falling as much as 0.8% to touch 1.1161 per dollar in Asian trade as growing political and fiscal concerns in the region weighed on investor sentiment. Fast-money funds in Asia reportedly sold the euro for dollars in spot trading, pushing prices past barrier levels and triggering options-related selling that compounded the decline, according to Bloomberg. Brent Donnelly, president of foreign exchange trading at analytics firm Spectra Markets, said the French politics trade that many expected would escalate this winter as April 2027 elections neared is here now, adding that any budget promises made by the French government now are not super credible with a change of power coming soon. French bond futures dipped 0.13%, close to record lows they have been hugging in recent weeks, while the yield on US 10-year Treasury notes stood at 5.262% as some calm returned following a spike to a 24-year high last week that rattled markets. Sterling slipped 0.24% to $1.32064 and the Japanese yen changed hands at 157.92 per dollar, leaving the dollar index up 0.47% at 102.37.
Euro falls to 17-month low on French political/fiscal risk and fast-money euro selling, weakening the euro versus the dollar.
US 10-year Treasury yield at 5.262% as calm returns after last week's spike, with euro weakness and dollar strength supporting yields.
