FXstreet.com (Córdoba) - The Euro is finding footing today after a better than expected Italian bond auction has cooled fears of an all-out onslaught in the bond market (that, and of course, the European Central Bank's OMT safety net, which was the propellant for the EURUSD rally off of the July 24 low at 1.2041), according to Christopher Vecchio, Currency Analyst at DailyFX.
"But concerns remain, as the bond auction showed", the Italian treasury met its goal but yields rose. "Thus, while it's clear that sovereign credit risk is rising again - perhaps even better illustrated by the performance of Gold in Euro terms, up by +2.28% this week so far - what's less clear is what happens to the split Italian government", Vecchio comments."Based on my own opinion, I believe there's a growing consensus that new elections will have to take place at some point in the next few months".
"But concerns remain, as the bond auction showed", the Italian treasury met its goal but yields rose. "Thus, while it's clear that sovereign credit risk is rising again - perhaps even better illustrated by the performance of Gold in Euro terms, up by +2.28% this week so far - what's less clear is what happens to the split Italian government", Vecchio comments."Based on my own opinion, I believe there's a growing consensus that new elections will have to take place at some point in the next few months".
