Home > Resource Hub > Daily Market News > Euro near 2-week low on worry about Italian leadership

Euro near 2-week low on worry about Italian leadership

Euro near 2-week low on worry about Italian leadership

The euro fell toward a two-week low against the dollar after Italy’s prime minister said he intends to resign, rekindling speculation a change in government will derail efforts to solve the nation’s debt crisis. On the other hand, Germany’s central bank on Friday warned that the euro zone’s biggest economy could soon enter recession, weighing on the euro. The German economy is suffering from the pressures of the Euro debt crisis, and have cut its economic forecast for 2012 and 2013 to 0.7% and 0.4% respectively. Improving export numbers could be a good sign for the German economy, and a rise in demand for exports among the country’s European neighbours would also be a sign of improvement for the entire region. The Euro did not significantly react to the better than expected German exports and trade balance.

The bleak view contrasted with strong U.S. job data published on Friday, which showed hiring by firms rose to 146,000 in November from 138,000 in October, defying predictions of a blow from superstorm Sandy. The U.S. unemployment rate also fell to a near four-year low of 7.7 percent, though analysts cautioned that the fall was partly due to decline in the labour participation rate, suggesting some Americans were giving up job-hunting. A big drop in U.S. consumer confidence took some shine off the dollar, and the dollar’s upside is also capped in the lead-up to this week’s Federal Reserve policy meeting.

On the FX market, the EUR/USD is trading slightly higher today’s after opening lower than Friday’s low, following news of Italy PM Monti’s resignation. The pair is currently trading right around 1.2900, and resistance could be provided by the key 1.3000 level.

Currency UK will offer you the best exchange rates available and ensure that your subsequent international transfers are handled as quickly and as efficiently as possible.

Do you want to earn some extra money? Then you can profit from our affiliate program by referring a company or friend that may benefit from our services and earn a commission in return. Contact us now on +44 (0)20 7738 0777 or click here.

Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.