Not everyone is convinced. Some view the antieuro sentiment as part of a broader populist protest against free trade and economic reform.

"This is sort of uncharted territory," says Jim Sarni, managing principal at bond investors Payden & Rygel Investment Management in Los Angeles. He has positions in government and corporate bonds in major European countries.

One of the great successes of the euro has been to deepen Europe's capital markets, especially the bond market, which blossomed with the introduction of the common currency in 1999. European government bond yields also converged because of a shared central-bank policy and interest rates.

Yet in what some see as a sign that investors are again distinguishing between European economies and their governments' ability to implement structural change, bond yields have been diverging. Italy's 10-year bond, for instance, yielded just 0.09 percentage point more than Germany's 10-year bond earlier this year. That differential is up to 0.22 percentage point and some think it will widen because of Italy's economic woes and large pockets of growing resistance to overhaul.

Italy's economy is in recession and, saddled with a strong currency, its goods aren't as competitive on world markets as they were when the euro was much weaker. But no longer in control of its own currency or monetary policy, Italy can't make its exports less costly by devaluing the euro or try to enhance growth by cutting interest rates. And with a budget deficit that already exceeds the limits allowed by the EU's Stability and Growth Pact -- one of the treaties that underpin the euro -- Italy can't easily increase government spending and borrowing.

France and Germany face similar, if less acute, problems that could also weigh on their bonds. "Bond spreads will be volatile and some could widen further," says Mr. Sarni at Payden & Rygel. He also is bracing for more short-term weakness in the euro and has hedged his bond positions to protect against currency losses.

William Hummer, chief economist at Wayne Hummer Investments in Chicago, sees the euro at $1.15 by year end, compared with a prediction of $1.22 before France's referendum. "The economic implications of the French vote are more profound than popularly perceived," he says. The euro fetched $1.22 in late New York trading yesterday, down less than a penny.

Many central banks have indicated that they will gradually shift reserves to euros from dollars. But concern over the currency's staying power could cause some to pause. William Ryback, deputy chief executive of the Hong Kong Monetary Authority, recently said that "right now, I'm not sure, looking at the euro, that that's an attractive investment." Meanwhile, he said, "The U.S. dollar remains a significant game in town."

Joseph Quinlan, chief market strategist at Banc of America Capital Management, told clients last week that the euro's chances of replacing the dollar as the world's reserve currency were slim and that investors who had been contemplating diversifying out of dollar-denominated assets into euro assets should reassess that strategy.

The French and Dutch no votes "reinforce the view that Europe is a dithering dysfunctional family, unwilling and unable to make tough economic and political decisions," he said. "Europe is now more divided than united, weaker than stronger, and more inward than outward looking. Its stature as a global force in both diplomatic and economic senses is now in question."

Write to Craig Karmin at craig.karmin@wsj.com¹ and Michael R. Sesit at michael.sesit@wsj.com²