Euro Holds Firm Despite France’s Credit Downgrade

The euro remained resilient even after Fitch downgraded France’s credit rating, citing rising debt, political polarization, and fiscal risks. French bond spreads widened against German bunds, highlighting investor caution. In response, new Prime Minister Lecornu scrapped a controversial plan to abolish two public holidays but stressed that fresh budget cuts remain necessary.

U.S. Outlook

Attention now turns to the Federal Reserve’s policy meeting on Wednesday. Some analysts see the possibility of a 50 basis point cut, arguing that a weakening labor market requires recalibration. President Trump has also publicly backed a deeper cut, while Treasury Secretary Bessant pointed to progress in U.S.–China trade talks despite Beijing’s tough demands.

Key Data Today

Traders will watch the Empire State manufacturing survey, alongside remarks from ECB officials including Isabel Schnabel, Claudia Köker, and Christine Lagarde, which could provide fresh insight into the eurozone’s monetary policy stance.