The euro touched a weekly bottom against the US dollar at the Friday trading. With the negative statements of the European Commission regarding draft budget in Italy, the political tension seems to return to the euro area.
At the end of the week, the US Dollar index rose to 95.79. Yesterday, the session was closed with the highest index since late August.
The euro-to-US dollar exchange rate dropped to 1.1448. The negative dynamics is related to the recent statements of the EU, saying strong violation of the EU budget rules.
Considering the majors, the sterling got stronger vs the US dollar reaching 1.3024. At the same time, Japanese yen slackened with US dollar-to-yen rate staying at 112.43 (some 0.23% up).
The EU representatives notified Italy's Minister of Economic Affairs Giovanni Tria that the European Commission considered expenses planned by the government in new budged too high, and structural deficit without one-off items and the economic cycle would increase rather than decline, along with the state debt failing to reach the EU requirements.
As a result, the market is again concerned about escalating political tensions between Brussels and EU members, which consequently depressed the European currency.
It is worth mentioning, the greenback faces certain pressure from increasing geopolitical tensions in terms of US-Saudi Arabia issue, making players stick to risk aversion strategy.