Dollar Index hits an 18-month high on French debt fears

France's government owes close to 120% of what its economy produces in a year. The gap between what France and Germany pay to borrow for 10 years reached about 1.5 percentage points on Friday, the widest since 2011. European Central Bank (ECB) President Lagarde had told a French newspaper two days earlier that this isn't 2011.

The Euro makes up 57.6% of the Dollar Index, and its fall to the lowest since May 2025 accounted for about three-quarters of the index's climb to Monday's high.

The Institute for Supply Management (ISM) services index came in at 54.9 against a 55 forecast. Most of the index's slide after the release came from the Euro rising back above 1.1200, not from lower US yields, which edged higher.

On the charts

Monday's rise came mostly in two bursts, through the October 1 high near 102.20 to a peak just above 102.50. The index has since given back about half of that gain in two drops, and both have held above 102.00. The rebound between the drops stalled short of 102.40, and the ISM release near that high produced a dip that was gone within four bars.

The pullback from the peak is less than a tenth of the run from the September 9 low near 98.60, after three straight weekly gains. Momentum gauges remained pinned near maximum readings since late September.

DXY daily chart