The euro fluctuated today as the mounting pressure for Italian Prime Minister Silvio Berlusconi added Italy to the list of countries investors should be worried about. In fact, Italy was on that list, together with Portugal, Ireland, Spain and Greece, and traders were just reminded that the problems of the European Union aren’t limited only to Greece.
Today’s vote should demonstrate whether Italian leader has enough support to stay in power. Meanwhile, traders stay in alert mood, preferring to run away from the euro to other currencies. Greece already went through losing of its Prime Minister and currently it’s hard to tell how good (or bad) such event is for the country.
The interest rate cut, performed by the European Central Bank on November 3, should support the euro in the long run, but in shorter term it had some negative consequences as the press conference after the monetary decision revealed rather dovish outlook of the bank’s members. Mario Draghi, President of the ECB, said on the press conference:
There are signs that previously identified downside risks have been materialising, as reflected in unfavourable evidence from survey data.
EUR/USD was down from 1.3774 to 1.3723 today before trading at 1.3786 as of 12:42 GMT. EUR/JPY was at 107.55 after falling from 107.53 to 107.10 earlier.
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