Euro hits 17-month low as political uncertainty in Spain and France rattles markets

The euro hit its weakest level against the U.S. dollar in 17 months on Monday, as concerns over the political trajectories of two of the euro zone's biggest economies spill over into wider markets. The eurozone currency was last 0.6% lower against the greenback, hitting its lowest level since May 19, 2025, according to LSEG data. That comes as the euro zone grapples with a simultaneous rise in inflation, interest rates and government borrowing costs.Stock Chart IconStock chart iconEuro/U.S. dollarThe U.S. faces similar pressures, but investors are increasingly unsettled by additional vulnerabilities unique to Europe: persistently weak growth, a fragmented bond market and political uncertainty in Spain and France.Spanish Prime Minister Pedro Sánchez is on Monday expected to call a snap election, as protests over the country's housing crisis reach boiling point. France meanwhile remains the "poster child" for Europe's sovereign market problems, as mounting debt piles become more expensive to service. Economists at Barclays said Friday that while the French government had presented a draft outline of its 2027 budget, aimed at reducing the public deficit from 5.4% of GDP to 5% next yea...