Fitch Ratings kept France’s long-term sovereign rating at A+ but changed its outlook to negative on Oct. 30, a decision ING says may weigh on a euro recovery against the U.S. dollar.
Chris Turner, ING’s global head of markets and regional head of research for UK & CEE, said the outlook change may restrain the euro even if energy prices soften. He sees possible selling interest around EUR/USD 1.1200–1.1250 if the pair reaches that range.
France’s GDP fell 0.1% in the third quarter of 2026 after no change in the second quarter, the National Institute of Statistics and Economic Studies (Insee) said. Exports declined 1.7%, while imports rose 0.1%.
Fitch said an off-calendar review was warranted by developments in France. Since its August assessment, economic growth had weakened as borrowing costs and the budget deficit rose, the agency said. It also cited political divisions and social strain that could make sustained budget repair more difficult.
The French 10-year government bond yield stood at 4.9% at October’s end, compared with 4.1% at Fitch’s August review. The gap between French and German 10-year yields briefly reached 174 basis points late in October before easing into the 150s, the agency reported. EconoTimes previously covered the euro amid a widening French bond spread.
Fitch projects France’s debt will rise from 115.7% of GDP in 2025 to about 124% in 2028. The agency estimates that measures equal to about 3.5% of GDP would be needed to steady the debt path, up from its August estimate of 3.0%.
Fitch cited France’s large, diversified economy, strong institutions, euro-area membership and resilient banking sector as supports for the A+ rating. It forecasts a 5.5% deficit in 2027, above the 5% target in the government’s draft budget. Fitch said the government had projected a 6.4% deficit without new consolidation measures.
Fitch has not set a date for its next regular review, but expects to reassess the rating by the end of February 2027 at the latest. Insee’s detailed Q3 GDP release is scheduled for Nov. 27.
