Euro Slumps to 17-Month Low as French Debt Fears and Spanish Election Jolt Markets
The euro dropped to its lowest level against the US dollar in 17 months, touching $1.1161, driven by fiscal instability in France and political uncertainty in Spain. French 10-year bond yields hit a 24-year high, widening the spread with German bonds to 146 basis points, its largest jump in 17 years. Prime Minister Pedro Sánchez called a snap election for November 29 after his housing decrees were rejected. While the ECB maintains its focus on price stability, contagion fears have spread to Italian and Belgian bonds, prompting analysts to warn of further risk premiums.