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Reuters

Euro slips below $1.12 to a 17-month low as French bond stress fuels contagion fears

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Euro weakness is accelerating as rising French borrowing costs spill over into wider euro-area spreads, reviving euro-zone debt contagion risk. The France'Germany 10-year gap has widened sharply while peripheral spreads are also rising, prompting safety flows into Bunds and FX selling of EUR versus USD, CHF and JPY. Higher energy-driven inflation and tighter financing conditions deepen the ECB's policy trade-off between price stability and bond-market stabilization.
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NCFXEUR2USD/USDT+0.22%
AI تجزیاتی سمجھ · NCFXEUR2USD/USDTAI تجزیاتی سمجھ
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The euro fell below $1.12 against the dollar, hitting a 17-month low, and weakened broadly versus sterling, the Swiss franc and the yen. Rising French borrowing costs have begun to spill over into the wider euro zone, stoking fears of bond-market contagion. Analysts said the euro could test $1.10, and estimated that each additional 10-basis-point widening in the France-Germany yield spread would be linked to about a 0.4% drop in EUR/USD. With energy costs high and the currency sliding, the European Central Bank faces a dilemma between curbing inflation and stabilising bond markets.