Dollar holds firm as French fiscal woes keep euro on back foot

Business Recorder reported that the dollar began the week firmly, sitting close to a 17-month peak on Monday. Traders were recalibrating their bets on a Federal Reserve rate increase this month after softer US employment numbers. The euro, meanwhile, stood at $1.1246, just above its weakest point since May 2025, after four consecutive weekly drops tied to France's debt load and political deadlock ahead of next year's election.

Sterling was priced at $1.3241, while the yen bought 157.69 per US dollar in early Asian trade. The dollar index, which tracks the greenback against six major currencies, stood at 101.97. Global bond selling last week pushed borrowing costs to multi-decade highs and hit French government debt, as investors worried about inflation driven by expensive oil.

The yield on the US 10-year Treasury was 5.262%, below the 24-year high reached last week. Matthew Ryan of Ebury said higher Treasury yields make US assets more appealing, while the wider debt selloff is sending safe-haven money into the greenback. Bank of Singapore's Mansoor Mohi-uddin said the jobs data showed the labour market is not overheating, and traders now price a 78% chance the Fed holds rates in October, up from 36% a week earlier. Analysts, however, consider that pricing aggressive and expect fewer hikes than markets assume.