Euro slides to 17-month low against the dollar as France's debt crisis rattles currency markets

From the Newshound archive · first published 6 October 2026.

France's borrowing costs have risen above those of Italy and Greece, with investors now demanding yields of up to 5% on 10-year French bonds — a rate last seen in 2002. The euro fell as much as 0.9% on Monday to $1.116, its weakest since May 2025, and has lost ground against the dollar for four straight weeks. French public debt stands at €3.6 trillion, equivalent to 119% of GDP, as Prime Minister Sébastien Lecornu attempts to push a €54bn austerity budget through a resistant parliament.

Presidential frontrunner Marine Le Pen has unsettled markets further by calling for a referendum on fiscal discipline.

The ECB is seen as unable to intervene until the crisis becomes truly dire, leaving France with no obvious backstop.