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Euro depreciation against US dollar

Updated 7 times since CLSTR started tracking revisions of this situation.

What changed

2026-10-05 14:16 UTC → 2026-10-05 15:50 UTC · added ~~removed~~

The euro has continued its decline against the US dollar, dropping below the 1.12 threshold to reach lows near ~~$1.1161. This represents~~ $1.1161, marking its lowest level against the dollar in 17 months. In the United States, the dollar is being strengthened by rising Treasury yields and market uncertainty surrounding the US midterm elections. Within the Eurozone, the currency remains under pressure from escalating fiscal and political instability. In France, investor anxiety has intensified as public debt has reached nearly 119% of GDP. The widening yield spread between French and German 10-year bonds has reached approximately 146 basis points, marking its largest weekly increase in 17 years. Recent developments show French 10-year borrowing costs climbing toward 5%, with the yield spread reaching levels not seen since the 2011 sovereign debt crisis. While the French government has proposed fiscal tightening to reduce the deficit toward 5% of GDP, analysts from JPMorgan and ING suggest the euro may not yet fully reflect the deterioration of the French bond market, as skepticism remains regarding the government’s ability to implement cuts amid political fragmentation. Simultaneously, political tension in Spain has increased following Prime Minister Pedro Sanchez’s call for snap legislative elections on November 29, a move following the parliamentary rejection of key housing decrees. These converging factors—ranging from sovereign debt fears to political volatility—have triggered a sell-off in European government bonds and prompted hedge funds to reduce euro positions, fueling concerns of renewed eurozone fragmentation.

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