The euro has slumped to its lowest level against the dollar in 17 months, amid growing concern that France’s debt position could threaten the stability of the wider single currency bloc. The single currency fell as much as 0.8% against the dollar in early trading on Monday, dropping below $1.12, its lowest level since May 2025.
Investors have cited concerns over France’s rising debt costs as the government works to control its public finances ahead of next year’s presidential election. France’s blue-chip Cac 40 index of leading company shares fell by 1% on Monday. The FTSE 100 was up 0.2%.
The announcement of a snap election in Spain on Monday has also contributed to eurozone uncertainty. The yield on French 10-year government bonds last week reached its highest level since 2002, before dipping back on Friday.
The gap between France and Germany’s borrowing costs, a measure of investor concern, has widened to its highest level since 2012. Analysts have warned that stresses in the French bond market could spread to other euro area countries.