Euro: Political risk weighs but downside seen limited – ABN AMRO
ABN AMRO strategist Georgette Boele notes that changes in interest rate spreads have encouraged speculative short Euro positions, while fiscal and political uncertainty in France and Spain has historically coincided with Euro (EUR) weakness versus the US Dollar (USD). Boele argues that much of this risk is already priced into French spreads and expects sentiment and EUR/USD to remain negative near term but without a continued sell-off.
Fiscal and political uncertainty hit euro
"Changes in interest rate spreads have encouraged speculative investors to take short euro and long dollar positions."
"The euro tends to weaken when government bond yields in a major eurozone country, or in several countries, rise sharply because of political and/or fiscal concerns. There was to some fear of contagion, and this impacts the currency as well."
"This suggests that periods of fiscal and political uncertainty in the eurozone often coincide with speculators holding net short euro positions and a lower EUR/USD. The graph below on the right shows the recent relationship between the ten-year French-German government bond spread and the euro."
"In last week’s FX Weekly, we said that political uncertainty would weigh on the euro towards the end of this year and in the first quarter of next year. This pressure has emerged sooner than we expected."
"For EUR/USD, sentiment may remain negative in the near term, but we do not expect the sell-off to continue. We therefore keep our end-2026 forecast unchanged at 1.15."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
House Finance panel chair says regulator actions on crypto ‘fall short’ of CLARITY bill
Vietnam: Strong GDP but rising inflation risks – Commerzbank
Incordex appoints Chen Wang to board of directors
Incordex appointed Chen Wang to its board effective Sept. 29, 2026. Wang founded his own brand. He has served as founder and board chairman of Yunnan Jinshengchang Technology and Trade since Oct. 2024. He previously led global pharmaceutical education operations at Meixin E-commerce. He later ran education operations at Zhuyuan Grop. Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Incordex Corp. published the original content used to generate this news brief via EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system operated by the U.S. Securities and Exchange Commission (Ref. ID: 0001477932-26-006080), on October 07, 2026, and is solely responsible for the information contained therein.
Exclusive Report - Sources say Apollo has submitted a non-binding offer to German energy company Uniper
Germany plans to sell up to 74.12% of its stake in Uniper, with Apollo joining the bidders. Other parties vying for the stake include EPH, Equinor, and KKR. The sale could value the company at around 10 billion euros. Background: Uniper was taken over by the German government in 2022 under a 13.5-billion-euro (15.1 billion USD) rescue package, following the energy crisis triggered by Russia’s invasion of Ukraine which heavily impacted the company's finances. Since the bailout, Berlin has recouped approximately 3.5 billion euros from Uniper, including repayments and dividends. As Germany’s largest gas importer, Uniper's potential sale could be one of Europe’s biggest utility transactions this year, highlighting the strategic importance of the company in the region's energy security. Comments on the deal: Energy supply has increasingly become a major geopolitical and strategic concern globally, as highlighted by supply disruptions from the Iran conflict and recent sabotage attempts targeting power infrastructure. Given Uniper's central role in German energy security, its future ownership is under close scrutiny. The German finance ministry, which oversees the government’s 99.12% holding in Uniper—advised by UBS and JPMorgan—is aiming to sell up to 74.12% to comply with the EU mandate to reduce its stake to a “blocking minority” by 2028. According to earlier Reuters reporting, Czech energy group EPH, controlled by billionaire Daniel Kretinsky, and a consortium comprising Brookfield and Canadian CPPIB, have already submitted indicative offers. Equinor and a consortium of KKR and German utility RWE have also reportedly made bids. KKR, RWE, and Equinor declined to comment. In terms of process, Uniper is being sold through a dual-track sale, where the government is also exploring a potential IPO. This public listing is reportedly favored by Uniper’s unions, who fear potential break-up of the company under new ownership. Apollo and Uniper both declined to comment for Reuters. A source involved in the talks said bidders are expected to learn in the coming weeks whether they advance to the next round. All sources requested anonymity as they are not authorized to speak publicly. (1 USD = 0.8933 euros)
Crypto prices
More
