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The budget proposes increasing both Italy's overall government debt and its deficit in the short run, pushing the deficit as high as 2.4% of GDP over the coming years. This means Italy will fall foul of a previously mandated deficit level of 0.8% of GDP maximum.
One analyst said a pattern is starting to emerge showing "the president willing to talk the USD lower whenever it starts to look a bit toppy."
"The fears of a no-deal Brexit have piled the pressure on the pound and the dollar’s rally has come as a sucker punch," Neil Wilson, the chief market analyst at Markets.com, said in an email.
Sterling has hit a fresh 11-month low against the dollar on Thursday amid continued fears over the prospect of a 'no deal' Brexit.
Lukman Otunuga, a research analyst at FXTM, said in an email: "Concerns of a potential hard Brexit scenario have haunted investor attraction towards the Pound and have left the currency vulnerable to downside shocks."
The pound hits 11-month low after UK minister says there’s a 60% chance of Britain crashing out of the EU with no deal
UK International Trade Secretary Liam Fox said in an interview published on Sunday that the chance of a no-deal Brexit — where Britain leaves the EU without a deal on future trading arrangements — had risen from 50% to 60%.
The euro slid versus the dollar Thursday after the European Central Bank said it would end its €2.5 trillion bond-buying program at the end of the year and expects to keep rates steady through next summer.
Italy may be renowned for its chaotic, dysfunctional politics but even by its standards, the last seven days have been crazy.
Italy's political situation deteriorated rapidly over the weekend, with the prospect of a fresh general election in the next few months looming large.
The euro is attempting to bounce back on Wednesday after its rapid decline amid the Italian markets crisis. Despite a bullish start to the day analysts have suggested the return is unlikely to hold.