The OPEC meeting and the US Nonfarm Payrolls rocked the market last week. The market is torn between optimism about the global economic recovery and concerns about the new coronavirus strains.
Euro moves to negative territory amid the prospect of early elections in Italy
On Monday, the common currency managed to win back the advantage gained at the beginning of the trading session. It moved to negative territory after the Italian president paved the way for elections, provoking concern that the Eurosceptic parties could increase their powers.
On Monday, Italian President Sergio Mattarella appointed ex-economist of the International Monetary Fund Carlo Cottarelli as interim prime minister, urging him to plan early elections and adopt a new budget.
Cottarelli is actually urged to achieve the adoption of the budget for 2019 before the end of 2018 - for this purpose he will need the support of the parliament, the majority of seats in which, according to the outcomes of previous elections, populists of the "Five Star" as well as "League" movement received. Considering these circumstances, early elections can be held in September.
Having soared by more than half a percentage point at the beginning of trading in London to an intra-session peak of up to $1,17285 the common currency dived steeply and inched down about 0.26%, sinking to about $1.1621.
The common currency was suppressed by a soaring greenback and an increase in the difference in the yield of Italian as well as German bonds.
Against the background of the weakness of the common currency, the US dollar index soared to a basket of six major currencies, adding up to 0.24% to 94,414.
As a matter of fact, the evergreen buck was trading without sharp fluctuations versus the Japanese yen coming up with an outcome of nearly 109.30 yen. The escape from risk eased after US President Donald Trump told on Sunday that the US delegation had arrived in the DPRK to prepare for his meeting with North Korean leader Kim Jong-no.
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.
The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!