Title: Euro Falls on Russia Risk and France Protests
Content: The euro fell against most Group-of-10 peers as tensions in Ukraine escalated and widespread protests in France deepened worries about the country’s fiscal health. The common currency weakened as much as 0.5% versus the dollar in early Asia Monday after Ukrainian President Volodymyr Zelenskyy accused President Donald Trump of trying to pressure Kyiv into surrendering to Russia. Over in France, protests in several cities descended into clashes between police and demonstrators, sparking some of the country’s worst street violence in years. The shared currency dropped as low as $1.1183 before paring some losses to trade around $1.1226 as at 8:44 am in Singapore. French bond futures declined as much as 52 ticks in early trading.
The euro has come under pressure after the US’s support for Moscow prompted Ukraine to step up drone strikes on Russian energy infrastructure — a move that’s likely to add to worries about higher oil prices, said Rodrigo Catril, a strategist at National Australia Bank. Meantime, the protests in France will make it difficult for authorities to implement austerity measures and all this may push the euro below $1.11, he added. Europe’s mounting geopolitical strains are undermining the euro at an already difficult moment, with high energy costs threatening to hurt the region’s economic growth.
To make matters worse, France is grappling with discontent over high living costs and student dissatisfaction over the education system. But there’s little room for French officials to spend their way out of the crisis this time, with the ballooning budget deficit being the root cause of investor unease. The euro has underperformed all its G10 peers over the past one month, and it fell to the lowest since May 2025 last week. Hedge funds are now most bearish on the euro since July, according to data from the Commodity Futures Trading Commission for the week ending Oct. 13.
The clashes come at a critical time for France with a presidential election looming in April. The French National Assembly started discussing next year’s budget last week. The government’s bill features €43 billion ($48.2 billion) in measures to bring down the deficit and appease financial-market worries about the country’s public finances. “France’s fiscal problems are daunting enough in their own right, but are made even harder to fix by the upcoming presidential election and a hung Parliament, where consensus-building has often proved to be an impossible task,” Barclays strategists led by Themistoklis Fiotakis wrote in a note. “The medium-term outlook remains negative” for the euro, they added.
FAQ Q: What factors are driving the euro lower against the dollar?
FAQ A: The euro is under pressure from escalating Russia-Ukraine tensions, domestic protests in France over fiscal concerns, and broader geopolitical uncertainty. Strategists note that France's budget deficit and political gridlock ahead of its presidential election further weigh on sentiment.
Источник: Bloomberg Markets · Сводку подготовил HeadlinesBriefing