Core Viewpoint - The euro is experiencing a decline against the US dollar, currently trading around 1.16, influenced by political developments in France and the potential widening of the yield spread between French and German government bonds [1] Group 1: Currency Movement - As of August 27, the euro to US dollar exchange rate is at 1.1626, reflecting a decrease of 0.14% from the previous closing rate of 1.1643 [1] - Analysts suggest that the euro may drop to around 1.14 if the yield spread between French and German 10-year government bonds increases from 78 basis points to 90 basis points due to potential temporary elections in France [1] Group 2: Political Influence - French Prime Minister Borne is seeking parliamentary support for a significant budget-cutting plan, which could impact the euro's performance [1] - The political dynamics in France are expected to be a key driver for the euro's movement, especially if market conditions remain unaffected by unexpected US data or comments from Trump regarding tariffs [1] Group 3: Technical Analysis - The euro is currently testing the support level of the 20-day simple moving average at 1.1608, with bearish sentiment emerging as the relative strength index (RSI) has fallen below the neutral line [1] - Short positions are targeting a drop to 1.1550, indicating a prevailing bearish outlook in the near term [1]