FX.co ★ Euro Slides as European Bond Yields Surge on Fiscal Concerns

The euro edged closer to $1.16 as European government bond yields rose, drawing investor attention to escalating fiscal concerns. French and German 30-year yields reached levels not observed since the 2011 eurozone sovereign debt crisis. Germany's medium-term financial strategy projects around €500 billion in net new borrowing by 2029, aimed at boosting infrastructure and defense spending. In France, apprehensions about the nation’s debt are influencing the upcoming confidence vote for the Prime Minister. Additionally, eurozone inflation increased to 2.1% in August, slightly surpassing market predictions and the European Central Bank's 2% target, supporting expectations that the central bank will maintain its current interest rates at the upcoming meeting.