Hedge funds and other currency traders are increasingly positioning for further weakness in the euro as concerns over France’s public finances and growing political uncertainty weigh on the currency, according to a report by Bloomberg.The euro fell to a 16-month low against sterling on Wednesday and approached its weakest level in a year against the yen, extending a broader decline that has seen investors look beyond the dollar for ways to bet against the common currency.The euro dropped as much as 0.7% against the dollar to $1.1176 and fell 0.4% against sterling to 84.48 pence, its lowest level since June 2025. The currency had also reached a 17-month low against the dollar earlier in the week.France’s deteriorating fiscal position has become a key source of concern for investors, with rising government bond yields and renewed fears of political instability adding to pressure on the euro. The prospect of further political disruption ahead of France’s presidential election has also heightened uncertainty, according to Jane Foley, strategist at Rabobank.The pressure has spread beyond French debt markets, with a selloff in European government bonds last week reviving concerns about the region’s debt vulnerabilities. Political developments elsewhere in Europe, including Spain’s call for snap elections, have added another layer of uncertainty for currency investors.Hedge funds have increasingly used euro crosses to express bearish positions, favouring the Swiss franc and yen, followed by sterling and the dollar, according to currency traders familiar with the transactions.The strategy allows investors to isolate euro-specific risks while avoiding some of the uncertainty surrounding the dollar and US fiscal outlook. Morgan Stanley strategists led by David Adams have recommended selling the euro against the Australian dollar and Swiss franc, citing European fiscal and political risks as well as the possibility of a more dovish European Central Bank if bond-market volatility persists.Markets have also reduced expectations for further ECB tightening. Interest-rate swaps are now pricing in the equivalent of three quarter-point increases by September 2027, down from four as recently as the start of last week.The shift in positioning is also evident in the options market. The cost of hedging swings in the euro against the yen has risen above that for dollar-yen by more than 100 basis points for the first time since March 2025. Meanwhile, one-month euro-sterling risk reversals have moved in favour of sterling for the first time since August 2024.
| # | Наименование новости | Тональность | Информативность | Дата публикации |
|---|---|---|---|---|
| 1 | Hedge funds up euro short bets as amid elevated French fiscal risks | 0 | 7.3 | 02-10-2026 |
| 2 | Euro hits 17-month low as French debt fears, US inflation lift dollar | 0 | 7.09 | 05-10-2026 |
| 3 | Hedge funds turn bearish on yen again as Japan-US rate gap persists | 0 | 7.7 | 05-10-2026 |
| 4 | Euro faces political, fiscal reckoning as it hovers near 17-month low | 0 | 6.12 | 06-10-2026 |
| 5 | FOREX-Euro slides to 17-month low, hit by rates and inflation cocktail | 0 | 9.41 | 01-10-2026 |
| 6 | 17 hónapos mélypontra zuhant az euró hétfőn | 0 | 10.94 | 05-10-2026 |
| 7 | Hedge funds scale back bullish yen bets after BOJ signals caution on further hikes | 0 | 7.52 | 28-09-2026 |
| 8 | Hedge fund trade unwinds amplify French bond market rout | 0 | 6.62 | 05-10-2026 |
| 9 | Can the Euro Survive Europe’s New Energy Shock? | 0 | 8.69 | 29-09-2026 |
| 10 | Рост долга Франции усилил риски нового кризиса еврозоны | 1 | 15.23 | 06-10-2026 |