Euro falls to a 17-month low as rumors of early elections in Spain increase concerns

智通财经2026/10/05 04:45

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Euro exchange rate falls to its lowest point in 17 months amid lingering political and economic concerns in France, and reports of a possible early election in Spain The euro has dropped to its lowest level since May 2025. According to sources, Spanish government officials are preparing for a possible early election, which has further exacerbated investor concerns over political and fiscal risks in Europe. During Asian trading hours, the euro/dollar exchange rate fell as much as 0.8%, reaching 1.1161. Traders revealed that Asian hedge funds sold euros against the dollar in the spot market, triggering additional sell-offs after reaching certain key option levels and amplifying this round of declines. Three people close to Spanish Prime Minister Pedro Sánchez disclosed that, after the ruling party’s heavy defeat in last week’s parliamentary elections, some cabinet ministers as well as senior figures in the government and the ruling Socialist Party believe that an early election is the best solution. As discussions are still confidential, these individuals requested anonymity. Before this news, concerns in the market were also rising over France's political stability and budget outlook. Homin Lee, Senior Macro Strategist at Lombard Odier Singapore Ltd., noted that current trends in the bond and foreign exchange markets clearly reflect investor anxiety about the continued decline in the stability of the French government and the gradual loosening of fiscal constraints ahead of the 2027 election.

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