Strength in the EUR may have been the flipside of some USD weakness, but it was harder to fathom with further spread widening in Italian bond yields over Bunds, according to Greg Gibbs, Analyst at Amplifying Global FX Capital.
Key Quotes
“Political risk in Italy increased after a strong performance by right-winged anti-immigration, Eurosceptic parties in municipal elections.”
“The German IFO business climate indicator fell a bit further in June, continuing to suggest that the European economy has lost momentum this year. Furthermore, Germany’s political stability continues to be unsettled by a disagreement over immigration policy.”
“Tougher US trade policy, including threats by the US administration to impose higher broad-ranging tariffs on European cars, can hardly help bolster confidence for the Eurozone.”
“As such, it is difficult to see sustained gains in the EUR.”
Share
