EUR/USD rebounds are likely to be short-term and capped - Westpac
|Italy’s populist coalition had been a source of concern since the March election, according to Tim Riddell, Research Analyst at Westpac.
Key Quotes
“Their first budget was expected to test EU budget responsibility amidst fears of a fiscal blowout due to the opposing stances of the rightwing League and spending-friendly 5 Star. Though still a risk, their budget appears to be falling well inside EU’s 3% deficit to GDP guidance and so a potential negative for EUR is turning into a supportive factor.”
“Last week Draghi downplayed downside risks for a balanced and neutral outlook while maintaining their forward guidance. In addition to flash and Germany’s IFO survey, the ECB will be closely watching for any upside pressures within coming inflation data to offset external downside risks and persisting moderation in hard activity data.”
“EUR/USD rebounds on the back of Italy’s reduced budget risk and consolidation in USD are likely to be short-term and capped within the current 1.12-1.19 range.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.