French fiscal crisis deepens, euro drops to its lowest level against the pound since June last year

智通财经2026/10/07 09:16

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Due to the ongoing fiscal crisis in France and new political risks emerging in Europe, the euro dropped against the pound to its lowest level since June last year. The euro fell as much as 0.4% against the pound to 0.8449, breaking below this year's low set in July. Earlier this week, the euro had already fallen to a 17-month low against the US dollar, and on Wednesday, it also underperformed most G10 currencies. France is currently facing increasing pressure in its bond market. Missed fiscal deficit targets, gridlocked policies, and the possibility of significant policy shifts due to next year's presidential election are all undermining investor confidence. On Tuesday, far-right presidential candidate Marine Le Pen called on the European Central Bank to intervene in order to reduce the rapidly rising government financing costs. The turmoil in the French market has already spread to the European government bond market. Last week, European bonds experienced a large-scale sell-off, reviving memories of the eurozone debt crisis.

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