Euro nears lows as French political tensions rise

Evidence tier: A1 Evidence type: Auto-discovered official publication Source: Convera Company News Official publication date: 2026-10-20 Captured: 2026-10-20T12:38:19.634Z

Key Takeaways

• The euro weakened due to renewed political unrest in France, raising fiscal concerns and pushing bond yields higher.
• EUR/USD fell 0.5%, approaching 18-month lows, while the euro’s decline favored AUD/EUR reaching three-year highs.
• The Australian dollar outperformed, with AUD/USD rising 0.5%, despite broader trends under pressure after last week’s sell-off.
• China’s GDP growth of 4.5% exceeded forecasts, driven by exports and manufacturing, though domestic demand remains weak.
• Stronger Chinese growth supports regional currencies, while USD/SGD remained stable amidst these developments.

Euro weaker as French tensions rise

The euro was under pressure on Monday as renewed political unrest in France added to existing concerns about the country’s fiscal outlook.

Ongoing protests across France pushed French government bonds yields higher and added to worries around the government’s ability to deal with already-elevated budget pressures. French fiscal concerns have been a major drag on the euro in recent weeks, with rising French bond yields and widening spreads versus Germany weighing on sentiment.

EUR/USD fell as much as 0.5% during Asian trade and moved back towards 18-month lows before recovering some of its losses overnight.

The euro’s broader weakness also pushed AUD/EUR towards three-year highs, creating increasingly attractive levels for Australian businesses with upcoming euro payments.

Aussie leads gains

The Australian dollar was the strongest-performing major currency on Monday, with AUD/USD gaining 0.5%.

The move extended the Aussie’s recovery from last week’s three-month lows, although the broader technical trend remains under pressure following the recent sharp sell-off.

Attention now turns to comments from Reserve Bank of Australia Deputy Governor Andrew Hauser, due on Wednesday, for further clues on the interest rate outlook ahead of next week’s Australian inflation report.

The kiwi also gained, with NZD/USD rising 0.2%.

China growth beats forecasts

China’s September-quarter GDP surprised to the upside, with the economy expanding 4.5% y/y, above expectations of 4.4% and up from 4.3% in the previous quarter.

On a quarterly basis, GDP grew 1.2%, also beating the 1.0% forecast.

The stronger result was driven largely by exports and factory production, with AI-related demand continuing to support manufacturing activity.

However, the recovery remains uneven. Domestic demand and consumer spending remain relatively weak, suggesting stronger production and exports have yet to translate into a broad-based improvement across China’s economy.

USD/CNH fell 0.1%.

For regional currencies, the better-than-expected growth numbers provide some support, although the outlook will remain sensitive to the strength of domestic demand and the broader US dollar trend. USD/SGD was flat.

Aussie nears 0.7000

Table: seven-day rolling currency trends and trading ranges

Key global risk events

Calendar: 19 – 24 October

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.