There were high hopes for the latest Italian debt sale, but they were disappointed. Indeed, even though Italian debt costs dropped below 5 percent, the sale failed to raise the kind of money needed to overcome some of the budget woes. As a result, the euro is down against its major counterparts.
Italy’s debt costs dropped largely because of the loans it received from the ECB. However, even that was not enough to spur interest in buying, and Italy raised less than five billion euros from the latest auction. On top of that, Greece’s debt swap deal is not quite done, and could fall through at any moment. The result is a euro that can’t quite get ahead today.
However, euro’s losses have been limited lately, since there has been good news about the eurozone economy. Economic indicators, especially those in the area of trade, indicate that there is a level of resilience in the eurozone economy, and that is helping to prevent a complete crash by the euro today.
Also weighing on risk appetite in general is a disappointing earnings report from JPMorgan. This bank is the first of the financials to report this earnings season, and the news was not as good as hoped.
At 14:12 GMT EUR/USD is lower at 1.2704, down from the open at 1.2816. EUR/GBP is down to 0.8303 from the open at 0.8359. EUR/JPY is down to 97.7425 from the open at 98.3650.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.
Be First to Comment