Euro rises on peace talks progress

24 Kasım 2025

Euro rises on peace talks progress, political risks in France could cap gains

Today’s markets analysis on behalf of Frank Walbaum Market Analyst at Naga

The euro advanced on Monday as improved geopolitical sentiment supported risk appetite. Negotiators from the US and Ukraine signaled meaningful progress toward a refined peace framework. Talks in Geneva were described as “highly productive,” which could support a more positive sentiment for European markets. The constructive tone gave the euro a lift, reflecting expectations of reduced geopolitical risks in Europe.

Still, the currency’s upside remains constrained by fiscal and political uncertainty in France. Over the weekend, the National Assembly rejected key sections of the 2026 budget bill, reigniting concerns about Paris’s ability to deliver fiscal consolidation at a time when investors remain vigilant over sovereign risks.

Economic data also surprised to the downside, with Germany’s Ifo Business Climate Index slipping to 88.1 in November, undershooting expectations. The decline was driven by a sharp fall in the expectations component, reinforcing the view that Europe’s largest economy remains fragile despite a slight improvement in current conditions.

Eurozone yields fell across the curve, reflecting the cautious macro backdrop. Germany’s 10-year Bund edged down to 2.68%, while the French 10-year yield eased to 3.45%. Markets could turn to new comments from ECB officials for clues on the next steps in monetary policy.

 

Zaid Barem / ymm