Euro plunges to 17-month low as France debt and Spain election fuel uncertainty

The euro fell to its lowest level against the US dollar in 17 months on Monday as concerns over France’s growing public debt and a sharp government bond sell-off shook markets.

The European currency dropped as much as 0.9 percent during trading, extending four consecutive weeks of declines against the dollar. One euro is now worth about US$1.12.

Pressure has increased as investors focus on France’s public finances. The yield on the country’s benchmark 10-year government bonds is approaching 5 percent, a multi-decade high that means the French government faces significantly higher borrowing costs.

Higher bond yields can also feed through to consumers by increasing borrowing costs for products such as fixed-rate mortgages and other loans.

Political uncertainty elsewhere in Europe is adding to market volatility. Spain called a snap election on Monday, raising further questions about the outlook for the eurozone.

The euro has also weakened against the British pound, falling to about 85p.

The latest decline puts the euro at its weakest level against the US dollar since May 2025, with concerns over government debt and political uncertainty weighing on the currency.