The euro fell to its lowest level since May 2025. Earlier, there were reports that Spanish government officials are preparing to hold an early general election, increasing investors' concerns about European political and financial risks. The exchange rate of the euro against the US dollar fell 0.8% in the Asian intraday period, hitting 1.1161. Traders said that Asian hedge funds sold the euro against the US dollar in the spot market, triggering more sales after hitting key prices for some options, further amplifying the decline. Three people close to Spanish Prime Minister Pedro Sánchez revealed that after the ruling party suffered a major defeat in the National Assembly election last week, some cabinet ministers and other senior members of the government and ruling Socialist Party believed that holding an early general election was the best strategy. As related discussions were not made public, these individuals requested anonymity. Prior to this news, market concerns about France's political stability and budget prospects were also growing. Homin Lee, senior macro strategist at Lombard Odier Singapore Ltd., said that the bonds and foreign exchange markets clearly reflect investors' unease about the growing instability of the French government and the gradual weakening of the country's financial constraints before the 2027 general election.

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