France faces a fresh budget battle that threatens to topple another government as debt costs spiral
Time is not on the side of French government bonds, strategists have warned, as the nation's deficit balloons.
The Euro (EUR) faced downward pressure against the US Dollar (USD) on Wednesday, hitting two-and-a-half month lows as it fell nearly 0.5% this week. Despite Eurozone Purchasing Managers Index (PMI) figures and falling oil prices offering some support, concerns over German political instability and France's increasing debt weighed on the currency.
The Eurozone's preliminary business activity data for September exceeded expectations, with both the HCOB Services PMI and HCOB Manufacturing PMI surpassing forecasts. However, German PMIs showed a mixed picture, with services sector activity growing and manufacturing activity slowing. German Chancellor Friedrich Merz's defeat in state elections and the rising deficit in France's debt have heightened investor concerns, which may impact Euro crosses.
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