# The Euro sells off hard as the French-German bond gap widens

> EUR/USD fell to its lowest since May 2025 after France unveiled a 2027 budget, and the French-German 10-year spread widened to 130 basis points, the widest since 2012. The ECB deposit rate is 2.50% after two hikes this year, and markets expect more tightening as euro area inflation runs above 3%. The Fed is at 3.75%-4.00%.

- Date: 2026-10-01 · published 2026-10-01T12:00:00.000Z
- Category: macro · region Eurozone · magnitude medium
- Page: https://feedsoft.ai/events/9649-the-euro-sells-off-hard-as-the-french-german-bond-gap-widens
- Commodities: [Euro (USD per EUR)](https://feedsoft.ai/c/EURUSD.md), [US Dollar (Broad)](https://feedsoft.ai/c/DXY.md)

## Why it matters

The widening rate gap between the ECB and the Fed supports a stronger dollar, which tends to pressure dollar-priced feed commodities. A weaker euro also shifts EU import competitiveness for feed ingredients.

## Read by commodity

- DXY: bullish ▲
- EURUSD: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| EURUSD | 2026-10-01 | 1 | -1.0% | -3.6 | France's 2027 budget pushed the French-German spread to its widest since 2012, adding euro-specific fiscal risk that drove EUR/USD to its lowest since May 2025. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| EURUSD | 2025-09-01 | [French political storm: What it means for bonds and the euro](https://feedsoft.ai/events/23535-french-political-storm-what-it-means-for-bonds-and-the-euro.md) | +0.5% | +0.3% |
| EURUSD | 2018-05-16 | [US and German bond yields have widened to levels not seen in almost 30 years](https://feedsoft.ai/events/65212-us-and-german-bond-yields-have-widened-to-levels-not-seen-in-almost-30-years.md) | -0.7% | -0.7% |
| EURUSD | 2020-05-12 | [What the German court decision against the ECB means for the euro](https://feedsoft.ai/events/53353-what-the-german-court-decision-against-the-ecb-means-for-the-euro.md) | +0.8% | +4.9% |
| EURUSD | 2019-11-29 | [Euro-Dollar Gets No Joy from Inflation Gains as German Politics and U.S. Tariff Threat Loom](https://feedsoft.ai/events/56280-euro-dollar-gets-no-joy-from-inflation-gains-as-german-politics-and-u-s-tariff.md) | +0.9% | +1.6% |
| EURUSD | 2017-02-03 | [Euro may be too weak for Germany but too strong for others](https://feedsoft.ai/events/72705-euro-may-be-too-weak-for-germany-but-too-strong-for-others.md) | -1.3% | -2.3% |
| DXY | 2018-05-16 | [US and German bond yields have widened to levels not seen in almost 30 years](https://feedsoft.ai/events/65212-us-and-german-bond-yields-have-widened-to-levels-not-seen-in-almost-30-years.md) | -0.0% | +0.9% |
| DXY | 2021-02-24 | [As bond selloff gets real, policymakers face fresh headache](https://feedsoft.ai/events/9593-as-bond-selloff-gets-real-policymakers-face-fresh-headache.md) | +0.6% | +1.2% |
| DXY | 2019-11-29 | [Euro-Dollar Gets No Joy from Inflation Gains as German Politics and U.S. Tariff Threat Loom](https://feedsoft.ai/events/56280-euro-dollar-gets-no-joy-from-inflation-gains-as-german-politics-and-u-s-tariff.md) | -0.6% | -1.8% |

## Sources

- fxstreet.com: https://www.fxstreet.com/news/the-euro-sells-off-hard-as-the-french-german-bond-gap-widens-202610012232

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.