Hedge funds are increasing bets on euro weakness against the dollar as political and fiscal risks in France grow. Data from the Depository Trust and Clearing Corp. showed euro-dollar put options volume more than doubled that of calls on Wednesday for contracts worth 100 million euros or more. CME Group Inc. reported puts outnumbered calls by about 2.5 to 1 on Tuesday.
Thomas Bureau of Societe Generale SA noted strong demand for euro downside across maturities, with hedge funds focusing on one-month contracts tied to upcoming central bank meetings. The euro fell 2.5% in September, its worst drop since July 2025, driven by France’s political instability and record bond issuance plans. Meera Chandan of JPMorgan Chase & Co. cited hawkish Fed repricing and widening French yield spreads as key factors.
Christine Lagarde warned rising yields may slow growth and inflation. Julian Weiss of Bank of America observed sustained demand for euro puts through 2027, reflecting concerns over Europe’s energy dependence and election volatility.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing