ING held its one-month euro target at $1.130 on Oct. 19 even as its valuation model pointed higher, citing French fiscal pressure that could limit the currency’s gains.
ING FX strategist Francesco Pesole estimated the euro’s short-term fair value at $1.137 to $1.139 in his morning note. He put the market rate 1.3% to 1.5% below that range but saw risks in both directions for the euro-dollar exchange rate.
The European Central Bank published an Oct. 19 reference rate of $1.1225 per euro. Its reference rates are provided for information and are not transaction prices.
France’s proposed 2027 budget aims to reduce the public deficit to 5.0% of gross domestic product from the government’s projected 5.4% in 2026. The French economy ministry expects debt-interest costs to climb to €91.2 billion in 2027 from €79.2 billion in 2026, leaving the state less room to maneuver. Public debate on the bill began in the National Assembly on Oct. 13, and its measures remain subject to change.
France’s national statistics agency Insee recorded a 2025 public deficit of 5.1% of GDP and public debt of 115.7% of GDP at year-end.
Agence France Trésor (AFT), France’s debt agency, recorded its 10-year constant-maturity yield index at 4.85% on Oct. 19, up from 4.79% on Oct. 16. The index tracks a notional French bond with 10 years to maturity. Separately, Pesole put the gap between French and German 10-year yields at roughly 135 to 140 basis points in his morning note.
Reuters reported a decline in the euro alongside a faster rise in French than German bond yields in an earlier market snapshot.
Gendarmerie nationale reported demonstrations across France on Oct. 17 and violent incidents in numerous cities. Pesole said the protests should weigh on French stocks and could spread to the bond market. He also said concerns about artificial intelligence might reduce expectations for further Federal Reserve rate increases, providing a possible counterweight for the euro.
Germany’s ZEW economic sentiment indicator is scheduled for Oct. 20 at 5:05 a.m. ET (9:05 UTC). Pesole identified the Oct. 23 eurozone purchasing managers’ index release as the week’s main euro-area data test.
