European markets and euro decline amid French political unrest

European stocks experienced their steepest weekly loss since early September, with the STOXX 600 index falling 1.4% for the week. The decline was driven by political instability in France and rising oil prices, which offset positive corporate earnings from companies such as SAP and L’Oreal.

The euro also faced downward pressure, tracking toward a weekly loss against both the US dollar and the Japanese yen. This currency weakness was fueled by concerns over France’s worsening budget problems and a sell-off in French government bonds, which pushed the country’s debt risk premium to its highest level since the 2011 eurozone sovereign debt crisis.

In the luxury sector, Kering saw a significant drop of 16.6% following a decline in third-quarter sales for Gucci. Meanwhile, the Japanese yen gained ground as investors sought safe-haven assets following a sell-off in artificial intelligence stocks.