Euro Faces Downward Pressure as French Political Turmoil Widens Sovereign Bond Spreads

EUR/USD trades under heavy pressure near 1.1200 as French political gridlock, civil unrest, and soaring European energy prices strain eurozone sentiment. The 10-year French-German sovereign bond spread widened up to 150 basis points, its highest level since the 2011 eurozone debt crisis. Earlier in the session, EUR/USD dipped to an 18-month low of 1.1110 before rebounding toward 1.1215. France's fiscal challenges include a 5.4% deficit-to-GDP ratio and 10-year yields holding at 4.812%, heightening scrutiny ahead of Moody's October 23 credit rating review.