LONDON, Oct 17 (Reuters) - Portugal's borrowing costs fell to a one-month low on Monday after the government slashed its deficit target in a move that was welcomed by investors in the country's debt.
Portugal's Socialist government on Friday announced a 2017 draft budget, saying it aimed to cut its deficit to 1.6 percent of economic output from this year's estimated 2.4 percent.
"There is some relief in Portugal and the deficit targets are positive," said DZ Bank strategist Christian Lenk.
Portugal's 10-year bond yield fell 3.5 basis points to 3.272 percent, its lowest level in a month, as other euro zone bond yields rose. (Reporting by Dhara Ranasinghe; Editing by John Geddie)