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The euro has now fallen against the dollar for four weeks in a row, with investors increasingly worried about France’s high debt levels and political uncertainty.

There are growing concerns about whether the French government can reduce its budget deficit, particularly as politicians prepare for next year’s presidential election.

The uncertainty in France, the eurozone’s second-largest economy, has put further pressure on the euro and unsettled currency markets.

Prime Minister Sébastien Lecornu is attempting to push through €54bn (£46bn) in public spending reductions as part of his budget, but faces fierce resistance from politicians vying to succeed Emmanuel Macron when voters go to the polls in April 2027.

Marine Le Pen, the hard-Right National Rally leader widely regarded as the presidential frontrunner, has done little to reassure markets about her fiscal discipline. Her proposal to put a “golden rule” on deficit restraint to a public vote has particularly unsettled investors.

Matt Cairns, an analyst at Rabobank, said: “That does not exactly inspire confidence given a population that has thus far rejected calls for cutting spending.”

He added: “With Le Pen’s star rising and a widely held view in the market that she too will lack the political will to get France’s fiscal balance sheet in order, it is perhaps little wonder the pressure is rising in France.”

The yield on French 10-year government bonds has climbed to within touching distance of 5pc, pushing borrowing costs to their highest point since 2002.

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Meanwhile, the spread between French and German bond yields has widened to levels last witnessed during the 2012 eurozone crisis.

The trajectory of the bond market has prompted stark warnings from analysts. Hauke Siemssen, an analyst at Commerzbank, said: “Latest bond market dynamics are increasingly concerning and somewhat reminiscent of a sovereign debt crisis.”

Jim Reid, an analyst at Deutsche Bank, said: “The big question is whether this is the start of a new euro sovereign crisis or whether markets have already overshot.”

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The comparisons to previous episodes of eurozone turmoil underscore the severity of the current market reaction to France’s fiscal predicament.

Further compounding eurozone jitters, Spanish Prime Minister Pedro Sanchez announced a snap election for 29 November.

The decision came after Spain’s parliament voted down a package of housing crisis measures on Friday, prompting Sanchez to call the early ballot on Monday.

The political turbulence on the Iberian Peninsula adds another layer of instability to a currency bloc already grappling with France’s fiscal woes.

Against sterling, the euro also lost ground, dropping as much as 0.5pc to just below 85p — its weakest reading against the pound since July.

The broad-based weakness in the single currency reflects deepening investor unease about the political and economic outlook across multiple eurozone member states simultaneously.