French Budget Crisis Limits EUR/USD Upside as Fed Rate Hike Expectations Cool

English summary

EUR/USD rose slightly to around 1.1225 in early Asian trading on Friday but faced upside limitations due to concerns over the French debt crisis. The France-Germany 10-year bond yield spread recorded its largest weekly increase in decades, and the French government announced a €54 billion savings plan to avoid rating downgrades. Meanwhile, FOMC minutes showed disagreement on rate hikes, with October hike odds dropping to 17.7%, while Governor Waller's hawkish stance supported the USD despite flexible pacing.