The euro fell to a near two-week low against the dollar as French fiscal concerns weighed on it. The dollar held near a two-week high on a tech-led Wall Street rebound. Central bank decisions from the Fed, the Bank of Japan and the ECB follow this week.
The euro fetched $1.1171 on Tuesday, a near two-week low. The currency is down about 1.5% in October, and French fiscal jitters dragged it lower.
French bond selloff pressures the euro
A selloff in French government bonds last week drove the country's debt-risk premium to its highest since the 2011 sovereign debt crisis. France's 10-year yield touched 5.14%, its highest since 2002, before recovering on Monday after Moody's spared Paris a downgrade on Friday.
Barclays strategists said French stress is unlikely to fade before next spring's presidential election. Capital.com senior market analyst Daniela Hathorn said: "investors are increasingly sensitive to the possibility that interest rates may remain elevated".
Dollar gains from the AI trade revival
The dollar index was steady at 102.11, supported by a revival in the artificial intelligence trade after weeks of funding worries. Anthropic made its U.S. IPO filing public on Monday, and the S&P 500 and Nasdaq rose 0.7% and 0.8%, with chipmakers leading.
Meanwhile, the yen weakened 0.1% to 157.66 per dollar, moving further from last week's one-month high.
Fed, BOJ and ECB decisions loom
The Federal Reserve, which opened a two-day meeting on Tuesday, is expected to leave rates at 3.75%-4.00% on Wednesday. Futures give less than a 10% chance of a rate hike this week but about 80% for December.
However, the Bank of Japan is set to hold rates at 1.25% on Friday, and the European Central Bank is also expected to hold its deposit rate at 2.5% on Thursday.
Source: Investing.com
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