Traders are increasingly pessimistic about the euro's outlook, and investors are worried about the fiscal challenges facing France and emerging political risks in Europe. The euro fell to a 16-month low against the pound on Wednesday, and is also approaching its lowest level in a year against the yen. Meanwhile, an indicator measuring EUR/GBP's bullish and bearish demand shows that traders are turning in favor of the pound for the first time in two years. Just a few days ago, EUR/USD fell to a 17-month low. The latest trend shows that traders are no longer shorting the euro simply through the US dollar. The European market has recently been sold off, and the French government is at risk of collapse. At the same time, the fiscal deficit may once again greatly exceed the target. Rabobank strategist Jane Foley said, “Concerns raised by France's failure to cut its budget deficit are further exacerbated by the uncertainty brought about by the upcoming French presidential election.” She said that the rise in French treasury bond yields and the wider sell-off of European high-debt national bonds are putting further pressure on the euro. As risks in Europe rise, traders are looking for a more direct way to express bearish views on the euro than the euro against the dollar, as the US fiscal outlook and concerns about the dollar's own risk premium may interfere with the trend of the euro against the US dollar. According to foreign exchange traders familiar with related transactions, hedge funds are increasingly inclined to express bearish views on the euro by shorting EUR/CHF and JPY, followed by the British pound and US dollar.

Traders are increasingly pessimistic about the euro's outlook, and investors are worried about the fiscal challenges facing France and emerging political risks in Europe. The euro fell to a 16-month low against the pound on Wednesday, and is also approaching its lowest level in a year against the yen. Meanwhile, an indicator measuring EUR/GBP's bullish and bearish demand shows that traders are turning in favor of the pound for the first time in two years. Just a few days ago, EUR/USD fell to a 17-month low. The latest trend shows that traders are no longer shorting the euro simply through the US dollar. The European market has recently been sold off, and the French government is at risk of collapse. At the same time, the fiscal deficit may once again greatly exceed the target. Rabobank strategist Jane Foley said, “Concerns raised by France's failure to cut its budget deficit are further exacerbated by the uncertainty brought about by the upcoming French presidential election.” She said that the rise in French treasury bond yields and the wider sell-off of European high-debt national bonds are putting further pressure on the euro. As risks in Europe rise, traders are looking for a more direct way to express bearish views on the euro than the euro against the dollar, as the US fiscal outlook and concerns about the dollar's own risk premium may interfere with the trend of the euro against the US dollar. According to foreign exchange traders familiar with related transactions, hedge funds are increasingly inclined to express bearish views on the euro by shorting EUR/CHF and JPY, followed by the British pound and US dollar.