europe union building

Italy uncertainty looms large

31st May 2018 Market Update

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?? GBP – Sterling retreats back against the single currency following the gains made on Tuesday, as political uncertainty pressured the euro as Italy struggles to form a government.

We have limited data from the UK today, though a continued weakening single currency could see the pound possibly trade higher.

?? EUR – The greenback fell on Wednesday against the euro to a 10-month low after a report stated Italy’s biggest party could possibly make a renewed attempt to form a coalition.

However, the single currency is likely to come under renewed pressure as the uncertainty regarding Italy’s struggles to form a government continues.
From the Eurozone we have data in the form of the inflation numbers at 9am, if badly received we could see a further weakening in the currency.

?? USD – From across the Atlantic, the greenback extended losses as global market jitters over Italy’s political uncertainty continued. In the form of data, the US economy grew for the first three months of the year coming in at an annualised pace of 2.2%, down from 2.9% in the three months of 2017 and beneath the 2.3% initial estimate. From the United States today we have data in the form of initial jobless claims and the Chicago purchasing managers index.

 

Key Announcements

?? EUR
09:00am: Eurozone CPI YoY 1.2%

?? USD
12:30pm: Initial Jobless claims 225,000 -234,000
13:45pm: Chicago Purchasing Managers Index 58.0 – 57.6

 

Summary: Euro sees some recovery from the sell off earlier in the week as market sentiment seems to have recovered somewhat.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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