The euro is set for a weekly loss against the dollar and the yen after a fresh sell-off in French government bonds. The dollar also lost ground as a tech-led selloff dented its safe-haven appeal. Next week's central bank meetings now draw the market's focus.
The euro headed for a weekly loss against the dollar and the yen as a fresh sell-off in France's government bonds pushed the country's debt risk premium to levels not seen since the euro area sovereign crisis in 2011 on Thursday. Strategists said that while both the euro and the dollar faced selling pressure this week, the single currency was hardest hit.
Against the dollar, the euro was last down 0.15% at $1.1198, set to end the week 0.42% lower. Against the yen, it touched its lowest level since October 2025 at 175.42 yen on Friday, down 0.24% and on track for a weekly decline of 1.18%.
Dollar loses its usual safe-haven flows
The greenback also came under pressure during the week as a tech-led market selloff showed the dollar was no longer attracting its usual safe-haven flows. Doubts about the sustainability of the AI investment boom fuelled expectations of a more dovish Federal Reserve.
However, the dollar index rose 0.16% to 101.75 after touching its lowest level since the beginning of the month at 101.44 on Thursday. It was on track for a 0.02% weekly rise.
Central bank meetings take centre stage
Commerzbank forex strategist Volkmar Baur said: "euro/dollar is currently like a deer caught in the headlights", waiting for next week's central bank meetings. The European Central Bank is expected to stay on hold on Thursday, but investors will scrutinize any hint about the rate outlook.
Data on Friday showed growth across the euro zone's private sector slowed to its weakest pace in four months in October, hurt by a renewed contraction in France.
In Japan, annual core consumer inflation exceeded the central bank's 2% target in September for the first time in nine months. The majority of economists polled by Reuters expect a hold from the BoJ on Friday of next week, followed by a quarter-point rate hike at the following meeting in December.
Source: Investing.com
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