ForexMedium•6 October 2026•
1 min read
EUR/USD Rebounds as French Fiscal Concerns Stabilize
Key Facts
1The EUR/USD pair rebounded as the French government took steps to reduce the deficit, narrowing the OAT-Bund spread.
2Expectations for an ECB rate hike in October evaporated following the surge in the French-German bond spread.
3Eurozone CPI showed headline inflation increasing due to energy prices, while the core measure ticked up to 2.5%.
The EUR/USD pair rebounded as the French government took steps to reduce the fiscal deficit, narrowing the OAT-Bund spread. Reuters reported that these measures helped stabilize the bond market and allowed the Euro's risk premium to unwind, after political uncertainty and deficit concerns had previously pushed spreads to levels not seen since the Eurozone debt crisis.
Eurozone CPI data showed headline inflation increasing due to energy prices, while the core measure remained at 2.5%. According to investinglive.com, expectations for an ECB rate hike in October have evaporated following the recent bond market volatility, as officials seek to avoid further pressure on French sovereign debt.