{
  "id": 12831097,
  "title": "Traders turn bearish on euro as amid growing French political and fiscal risks",
  "url": "https://urgent.news/2026/10/08/traders-turn-bearish-on-euro-as-amid-growing-french-political-and",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-08T08:38:00.000Z",
  "source": {
    "name": "Hedgeweek",
    "slug": "hedgeweek",
    "url": "https://hedgeweek.com/news/traders-turn-bearish-on-euro-as-amid-growing-french-political-and-fiscal-risks"
  },
  "original_language": "en",
  "account": "Currency traders are growing increasingly bearish on the euro due to concerns about France’s fiscal health and political instability, according to Bloomberg. On Wednesday, the euro hit a 16-month low against the British pound and neared its weakest level in a year versus the Japanese yen, further declining after investors sought alternative ways to bet against the common currency. The euro was as much as 0.7% lower against the dollar at $1.1176 and 0.4% weaker against sterling at 84.48 pence – its lowest since June 2025. France’s weakening fiscal standing has become a significant worry for investors, with soaring government bond yields and rising political uncertainty contributing to the euro's decline. Upcoming French presidential elections have also heightened the uncertainty, as noted by Jane Foley, a strategist at Rabobank. This pressure has not been limited to France’s debt markets, as a recent sell-off in European government bonds reignited concerns about the region’s debt vulnerabilities. Outside of France, political upheavals, such as Spain’s call for early elections, have added to the uncertainty for currency investors. Hedge funds have increasingly utilized euro crosses to express their bearish outlook, favoring the Swiss franc and yen over the dollar and other currencies, according to currency traders. Morgan Stanley strategists, headed by David Adams, have advised selling the euro against the Australian dollar and Swiss franc, citing European fiscal and political risks, as well as the potential for a more dovish European Central Bank due to ongoing bond-market volatility. Additionally, markets have lowered expectations for further rate hikes by the European Central Bank. Interest-rate swaps now reflect expectations of three quarter-point increases by September 2027, down from four earlier in the week. The options market is also reflecting this shift, with the cost of hedging against euro fluctuations against the yen surpassing that of dollar-yen by over 100 basis points for the first time since March 2025. Moreover, one-month euro-sterling risk reversals have moved in favor of sterling for the first time since August 2024.",
  "summary": "Hedge funds and other currency traders are increasingly positioning for further weakness in the euro as concerns over France’s public finances and growing political uncertainty weigh on the currency, according to a report by Bloomberg. The euro fell to a 16-month low against sterling on Wednesday and approached its weakest level in a year against the yen, extending a broader decline that has seen…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}