Euro falls to lowest level since May 2025
Political developments in France and talk of early Spanish elections pushed the euro down and widened French-German bond spreads.
The euro slid to its weakest level since May 2025, pressured by growing investor concern about political and fiscal risks across Europe.
During Asian trading the common currency fell as much as 0.8 percent, hitting the 17-month low as markets reacted to political developments in France and renewed talk of possible early elections in Spain.
Markets signal rising risk premia
The premium investors demand for French versus German government bonds widened to 152 basis points — the highest reading since 2011 — underscoring the shift in risk perception within the euro area.
Strategists at JPMorgan warned that the euro faces downside risk, particularly against the Swiss franc and the yen, citing the current political volatility in Europe as a key factor.
Adding pressure on the single currency was a firmer US dollar, supported by expectations that the Federal Reserve could tighten policy again if inflation stays elevated.
Photo: press material from the event
