Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

Euro stuck near seven-week low on Italy budget woes

Currencies Oct 09, 2018 04:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A new 20 Euro banknote is presented at the Austrian national bank in Vienna
 
EUR/USD
+0.01%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
EUR/CHF
+0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DXY
-0.12%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CNH
-0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Tom Finn

LONDON (Reuters) - The euro languished near a seven-week low on Tuesday as concerns about a row in the European Union over Italy's budget persisted.

The euro has tended not to budge in response to spikes in Italian bond yields triggered by developments in the dispute, with investors judging that Rome's spending plans will not impact the monetary policy of the European Central Bank.

But the threat of a showdown along with weakness in stock markets worldwide has seen traders who had bet on a fourth quarter euro rebound ditch the single currency.

The euro (EUR=EBS) fell 0.2 percent to $1.1465, close to a seven-week low of $1.146 reached during the previous session.

Italian government bond yields meanwhile edged down from 4-1/2-year highs on hopes that Economy Minister Giovanni Tria will strike a moderate tone when defending the government's budget in parliament.

"In light of current levels of stress in the Italian markets, the question now is how far the Bund/BTP yield gaps can blow out and how this could translate back into the FX market," said Simon Derrick, chief currency strategist at BNY Mellon.

Italy's Deputy Prime Minister on Monday denounced European Commission President Jean-Claude Juncker and Economics Commissioner Pierre Moscovici as enemies of Europe.

Derrick said increasingly it was the dollar rather than the Swiss franc that was benefiting from safe-haven trades in response to the concerns over Italy.

Against the Swiss franc (EURCHF=EBS), the euro gained 0.1 percent to 1.1414 (EURCHF=EBS).

Ten-year Treasury yields resumed their steep climb to seven-year highs on Tuesday. That helped the dollar strengthen across the board with only Japan's yen outperforming among the major currencies.

Against a basket of its rivals (DXY), the greenback rose 0.2 percent to 95.933, not far off a seven-week top of 96.127 hit last week.

The Chinese offshore yuan was slightly stronger on the day at 6.9160 yuan per dollar. It recovered somewhat after slipping about 0.35 percent overnight.

At the weekend, China's central bank moved to inject more liquidity into the financial system as policymakers worried about the economic impact of a heated trade row with the United States.

"U.S. yields are rising, whereas the Chinese authorities are trying to push down the Chinese yield. That's typically a stronger dollar/weaker renminbi situation," Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said.

"If the stimulus measures... by the Chinese authorities are regarded as positive for the Chinese economy, then it will support the renminbi," he said. "But at the moment, that's not the case."

Euro stuck near seven-week low on Italy budget woes
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email