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Euro sinks, largely due to France's record debt and political uncertainty D By David Chau

The euro has dropped to a 17-month low against the US dollar.

It's also near a 22-month low against the Australian dollar.

Essentially, concerns about France's ability to rein in its budget deficit and a sharp bond market sell-off last week stirred fears of a return of sovereign debt crisis dynamics in the euro zone.

French government bonds have been sold off as expectations of higher policy rates and rising political uncertainty cast doubt on the ability of the euro area's second-largest economy to put its public finances on a more sustainable footing.

“Latest bond market dynamics are increasingly concerning and somewhat reminiscent of a sovereign debt crisis," Hauke Siemssen, strategist at Commerzbank, said.