The euro steadied just above $1.165, hovering near its strongest level since October 6, as investors weighed the impact of S&P Global Ratings’ downgrade of France against improving global risk sentiment. S&P cut France’s sovereign rating to A+ from AA-, citing heightened risks to fiscal consolidation and persistent uncertainty surrounding government finances, despite the submission of the 2026 draft budget to parliament. At the same time, risk appetite improved amid signs of easing US-China trade tensions and stabilizing confidence in US regional banks. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet in Malaysia this week to avert a potential escalation in US tariffs on Chinese goods, which President Donald Trump described as unsustainable. Meanwhile, investors are awaiting the delayed US inflation data due Friday for further insight into the Federal Reserve’s rate-cut trajectory.
