Forex - EUR/SGD, EUR/USD Flows: FT: Matteo Renzi defends pace of Italian reform; happy if euro not as strong against USD; ECB Draghi

Published at 02:05 (GMT) 11 Aug  

FT: Italian PM Matteo Renzi says the eurozone's third-largest economy is on track to hit its EU-mandated budget targets this year despite falling back into recession in Q2 and, in a pugnacious interview with FT, defended the speed at which his reforms are moving.

Mr Renzi rejected suggestions made by ECB Pres (fellow countryman) Mario Draghi last week that the EU should intervene in countries where reforms were not being implemented fast enough to spur economic growth.

He admitted feeling worried about potential deflation in the eurozone. "I'm not a fearful person by nature...but it would make me happy if the euro weren't as strong against USD and if inflation were a bit higher," he said.

On FX, interesting comments from PM Renzi, saying he will decide reforms himself, and not the troika. Also voices concerns over potential deflation and looks for lower EUR/USD.

EUR/USD at 1.3399-01, could be weighed by PM Renzi comments. Offers 1.3420-50, bids at 1.3390-00, weak stops below 1.3385-90. Focus on 9-month lows of 1.3333. EUR/SGD at 1.6756-60, off the 2-week highs 1.6790-00 seen on Friday, highest since July 21 1.6816. Focus still on downside of the 1.65-1.70 range on the wide. Given dovish ECB, and still hawkish MAS.

USD/SGD at 1.2506-10, off the 2-month highs of 1.2550 seen on Friday, as USD broadly lower on later part of Friday. Offers 1.2540-50, bids 1.2500, stops below 1.25 again. WL