The euro is heading for its worst month against the British pound in more than four years, as concerns over France's fiscal position continue to weigh on the common currency. The euro dropped to its lowest level against the pound since June of last year, falling as much as 0.4% to 84.49 pence, below the 2026 low set in July.
France is facing a deepening bond market crisis, with sentiment souring over missed deficit targets, persistent political gridlock and the approach of a 2027 presidential election that could radically alter the country's direction. Yields on French ten-year government bonds hit their highest level since 2002 on Friday, while the spread over German ten-year yields ended the week at 140 basis points, a weekly gain of 34 basis points, the largest in seventeen years.