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Home / Business / Italy, Brexit worries weigh on European currencies as the dollar gains in value

Italy, Brexit worries weigh on European currencies as the dollar gains in value



Forex traders focused on key pairs early Monday, as developments in the Italian budget and Brexit pushed the euro and pound lower, adding one dollar.

Investors watch closely next steps between Italy and the UK The European Union weighed on the single currency of the Eurozone and pulled it to its lowest level since June 2017. Rome's first budget proposal for 2019, including a rising deficit, came last month declined.

Because Italy is the euro zone's third largest economy, market participants are witnessing the escalating conflict stemming from its political implications for the stability of the euro area and its financial and economic consequences if the country can not control its debt burden.

Read: Italy is "the # 1

risk factor in the fourth quarter" for European investment.

See also: Here are the reasons why investors do not feel comfortable about the Italian banks and the Doom loop "

" Rome has to resubmit its draft budget by tomorrow, according to which an excessive deficit procedure and sanctions could be imposed if it does not meet the requirements, "wrote Craig Erlam, senior market analyst at Oanda.

This should fuel the growing populism in Italy, which would certainly be avoided in Brussels However, as Rome is refusing to deviate from its 2.4% deficit target for 2019 at the moment, there must be some progress, "said Mr Erlam 19659002] The euro

EURUSD, -0.5646%

weakened below the $ 1.13 level, falling to its lowest level since the end of June 2017. The common currency has recently bought $ 1.2667, down from 1 , 1336 on late Friday in New York. [19659002] The ICE Dollar Index

DXY, + 0.37%

rose to its best level in more than 17 months, last by 0.5% to 97.376.

Meanwhile, the British pound is in the United Kingdom

GBPUSD, -0.7785%

had a weak start earlier this week as the Brexit negotiations once again weighed on the currency. One pound last bought $ 1.2871, compared to $ 1.2974

. Transport Minister Jo Johnson resigned on Friday. He was the last official to resign because of the negotiations between Brussels and London. Since it seemed plausible for a deal before the end of the year, as some progress had been made in recent weeks, optimism has since subsided.

The Irish border is still one of the key points for reaching a deal while trust remains Prime minister Theresa May will be able to reach an agreement week by week with parliamentary fluctuations.

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