EURUSD Stabilizing Ahead of Italian Budget Deadline
EURUSD price, news and analysis:
- The European Commission has given Italy a deadline of today to present it with a new Budget.
- Ahead of that, EURUSD is off its lows after hitting its weakest level for more than a year.
Euro steadier: Italian budget in focus
EURUSD has climbed modestly in Europe Tuesday after reaching its lowest level since June 27, 2017 Monday on concerns about a row between Italy and the European Commission over the Italian Budget.
Rome’s 2019 Budget proposals have already been rejected by the Commission, which has given it a deadline of today to present it with new plans or potentially face disciplinary proceedings.
EURUSD Price Chart, Five-Minute Timeframe (November 13, 2018)
However, EURUSD remains below the psychologically important 1.13 level and Italy seems unlikely to present revised plans that would be acceptable to the Commission. The country’s parliamentary Budget watchdog has forecast a 2019 Budget deficit of 2.6% of GDP, rather than the 2.4% forecast by the Government, and these factors will make a stronger recovery in EURUSD unlikely near-term.
Italy’s 10-year and 30-year government bond yields rose to their highest levels for two weeks ahead of the Tuesday deadline and further gains seem probable if, as expected, Rome makes no material changes to its Budget plans.
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--- Written by Martin Essex, Analyst and Editor