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Euro rebounds against dollar after France budget filing

EUR/USD is just above 1.1250 after France’s 2027 budget filing, as French 10-year yields steadied and the France-Germany yield spread narrowed.

Reported · Written up by our desk · Major Pairs

The euro regained ground versus the dollar, with EUR/USD moving back above Monday’s lows and trading just above 1.1250, after France sent its 2027 budget to parliament on Tuesday’s deadline, FXStreet reports. According to the outlet, French bonds steadied and the dollar eased broadly, helping reverse Monday’s drop. The extra yield on French 10-year debt versus German debt narrowed to about 1.3 percentage points from close to 1.6 at Friday’s peak. The budget also points to a larger interest bill, with France’s interest costs estimated at about €91 billion in 2027, FXStreet adds. The widening of the France-Germany yield gap since late September had previously pushed traders to reduce bets on an additional ECB hike. Money markets now price an October 29 ECB hike at about 60%, down from roughly 14% after late-September expectations, though a move by year end is still priced near 80%, the outlet reports. FXStreet also notes that ECB Chief Economist Lane said in a Tuesday interview that high energy costs have not yet produced strong knock-on effects on wages and wider prices.

Latest closeEUR/USD 1.122 ▼0.3%

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