The Euro Has Fallen to Its Lowest Level in Recent Months

Political instability, budget deficits and rising public debt in Europe are causing the euro to weaken against the US dollar. France’s financial problems, early elections in Spain and Italy’s debt burden are increasing economic concerns in the Eurozone and affecting global markets.

Fluctuations in global bond markets, tensions in the Middle East and high energy costs have intensified pressure on the euro. The euro-dollar exchange rate, which stood at 1.21 in January, has fallen to 1.11, its lowest level since May 2025. The euro has lost approximately 5% of its value this year.

One of the main factors behind the euro’s weakness is the financial situation of France, the Eurozone’s second-largest economy. The country’s budget deficit has reached 5.8% of GDP, while public debt has risen to €3.596 trillion. These figures exceed the limits set by the European Union. Rising yields on French government bonds have also heightened investor concerns.

ING analysts say political uncertainty is increasing the risk of an economic downturn in France. According to their forecast, the euro-dollar exchange rate could remain under pressure within the 1.10–1.15 range over the next 2 quarters. The euro’s future performance will depend on France’s budgetary measures and US economic policy.