The Italian risk premium, or the spread between the 10-year Italy and German government bond yields, jumped to two-month highs on Friday as focus turned to Italy’s political uncertainty.
According to Reuters, Italy’s main ruling parties on Friday cited snap elections as the only way out of the political impasse caused by Prime Minister Giuseppe Conte’s failure to drum up a parliamentary majority after scraping through a confidence vote.
A continued rise in the Italian risk premium may have a bearing on the single currency. EUR/USD is currently trading near 1.2173, having hit a high of 1.2190 on Friday.
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