Italy cuts budget deficit goal to 2% - Bloomberg

Omkar Godbole FXStreet Contributor

Italy's populist government has lowered its 2019 budget deficit target to 2.04% of economic output in a bid to comply with European Union's rules and avoid sanctions for failing to rein in debt, according to Bloomberg.

The new budget deficit target is considerably lower than the 2.4% projected in April's draft budget.

The deficit is expected to fall by €7.6 billion ($8.6 billion) this year, courtesy of higher revenues and lower spending, including €1.5 billion previously set aside for social programs in which demand has been lower than expected, the Finance Ministry said in a statement on Monday.

As a result, Italy's structural deficit (excludes temporary measures and effects that the EU uses to assess a country’s fiscal discipline) is seen improving by 0.3 percentage points in 2019, compared to the previous projection of 0.2 percentage points deterioration.

With Italy complying with the EU rules, the nation's bond yields may drop today, possibly helping the EUR stay bid.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold defends key $4,280 support ahead of Fed verdict

Gold is attempting another run above $4,300 early Wednesday, replicating a tepid bounce seen in Tuesday’s Asian trading. Gold’s next major directional move depends on the US Federal Reserve monetary policy decision and outlook due later in the day.

Ethereum continues to attract capital despite impending rate hike and Clarity Act failure

Ethereum declined to $2,400 on Tuesday after the Clarity Act failed to progress in the Senate. Despite that and the market's near certainty of an interest rate hike at the next Federal Reserve (Fed) meeting, the top altcoin has continued to attract fresh capital. Ethereum buyers have been dominating sellers over the past few days.

August UK inflation report expected to show rising inflation

The United Kingdom Office for National Statistics will publish the highly anticipated Consumer Price Index data for August on Wednesday at 06:00 GMT. The inflation report could trigger volatility in the British Pound, as it comes just one day before the Bank of England monetary policy decision.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.