Euro plummets as French bonds sell-off intensifies after a day relief
- The Euro underperforms its peers amid revival of French fiscal concerns.
- The sell-off in French bonds resumes after a pause on Tuesday.
- Investors await the FOMC minutes of the September policy meeting.
The Euro (EUR) comes under pressure against its peers again on Wednesday after a relief recovery the previous day. In the European trade, the major currency is down 0.63% at around 1.1188 against the US Dollar.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.63% | 0.44% | 0.14% | 0.14% | 0.37% | 0.42% | 0.04% | |
| EUR | -0.63% | -0.19% | -0.46% | -0.49% | -0.26% | -0.21% | -0.60% | |
| GBP | -0.44% | 0.19% | -0.27% | -0.30% | -0.07% | -0.02% | -0.39% | |
| JPY | -0.14% | 0.46% | 0.27% | -0.03% | 0.21% | 0.24% | -0.12% | |
| CAD | -0.14% | 0.49% | 0.30% | 0.03% | 0.23% | 0.28% | -0.09% | |
| AUD | -0.37% | 0.26% | 0.07% | -0.21% | -0.23% | 0.05% | -0.32% | |
| NZD | -0.42% | 0.21% | 0.02% | -0.24% | -0.28% | -0.05% | -0.36% | |
| CHF | -0.04% | 0.60% | 0.39% | 0.12% | 0.09% | 0.32% | 0.36% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The resumption of sell-off French government-backed securities has revived fears of wider spreads between bond yields from France and the rest of the Eurozone, weighing on the Euro. 10-year French bond yields surge 2.56% to near 4.91%, clawing back Tuesday’s entire downside move.
French bonds witnessed strong buying interest on Tuesday after presidential candidate Marine Le Pen proposed an increase in spending cuts to €140 billion, from €125 billion. This led to France’s 10-year yield declining approximately 11 basis points (bps) on Tuesday.
However, financial markets seem to be doubting that whether the minority government would be able to get the budget cuts passed in the Parliament without providing special concessions.
The French Higher Committee for Public Finance, also known as French fiscal watchdog, said last week that government's draft 2027 budget is very “optimistic”. The comments from the fiscal watchdog came at a time when the government put forward the €125 billion spending cut plan.
Meanwhile, the upbeat US Dollar is also weighing on the major currency pair. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades almost 0.5% higher at around 102.34.
Later in the day, investors will focus on the Federal Open Market Committee (FOMC) minutes of the September meeting, which will be published at 18:00 GMT.
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1190, extending its decline and keeping a clear bearish near-term bias as it holds well beneath the 20-day exponential moving average (EMA) at 1.1372. The Moving Average Exponential (20, close, 0) now acts as immediate overhead resistance, while the Relative Strength Index (14) at 22 reinforces a deeply oversold momentum backdrop that hints at persistent selling pressure despite the stretched conditions.
On the topside, initial resistance is located at the 20-day EMA at 1.1372, and a sustained recovery above this barrier would be needed to ease the current bearish tone. With no nearby structural supports from the provided dataset below the market, traders are likely to treat the recent low zone around 1.1190 as a provisional pivot, watching whether oversold RSI readings can trigger a corrective bounce or whether sellers press for fresh lows instead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
