Euro Drops to 17-Month Low: French Political and Economic Concerns Persist, Spain May Hold Early Elections
智通财经2026/10/05 04:06(1) The euro fell to its lowest level since May 2025. Earlier reports indicated that Spanish government officials are preparing for early elections, heightening investor concerns over political and fiscal risks in Europe. (2) The euro fell as much as 0.8% against the US dollar during Asian trading, reaching 1.1161. Traders said that Asian hedge funds were selling euro against the dollar in the spot market, triggering more sell-offs after hitting key option levels, which further amplified the decline. (3) Three people close to Spanish Prime Minister Pedro Sánchez revealed that after the ruling party’s heavy defeat in last week’s parliamentary elections, several cabinet ministers, as well as senior officials in the government and the ruling Socialist Party, believe that holding early elections would be the best strategy. Since the discussions were not public, these sources requested anonymity. (4) This news came amid growing market concerns about France’s political stability and budget outlook. (5) Homin Lee, Senior Macro Strategist at Lombard Odier Singapore Ltd., said that bond and currency markets are clearly reflecting investors’ unease over the increasing instability of the French government, as well as concerns about the gradual relaxation of fiscal discipline ahead of the country’s 2027 elections.
- The euro fell to its lowest level since May 2025. Earlier reports stated that Spanish government officials are preparing for early elections, intensifying investor concerns over political and fiscal risks in Europe.
- The euro against the U.S. dollar dropped as much as 0.8% during Asian trading, touching 1.1161. Traders noted that Asian hedge funds were selling the euro against the dollar in the spot market, triggering further sell-offs once certain key option levels were breached, which amplified the decline.
- Three people close to Spanish Prime Minister Pedro Sánchez revealed that, after the ruling party suffered a heavy defeat in last week's parliamentary elections, some cabinet ministers and top officials from both the government and the ruling Socialist Party believe that holding early elections is the best strategy. Due to the confidential nature of these discussions, the sources requested anonymity.
- Before this news broke, concerns in the market over France's political stability and budget outlook were also mounting.
- Homin Lee, Senior Macro Strategist at Lombard Odier Singapore Ltd., said that both the bond and currency markets are clearly reflecting investor anxiety over the increasing instability of the French government and a gradual weakening of fiscal discipline ahead of the 2027 elections.
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