27 September, 2018
The euro is losing grounds during the Asian trading in the second half of the week. The negative dynamics, in particular against the US dollar and yen, is related to the possible delay of the 2019 budget in Italy due to disagreements within the Cabinet.
This morning, the euro-to-US dollar rate fell to 1.1706, while the previous trading was closed near $1.1739. The European currency weakened vs the Japanese yen and sterling as well. Specifically, the euro-to-yen rate was recorded at 131.83. For reference, the US dollar-to-yen exchange rate stands at 112.62 (112.73 earlier).
At the same time, the euro is affected by the reports about the budget deficit in Italy, that can exceed the anticipated level. According to the market analysts, the 2019 budget brings the key uncertainties in Italy. Notably, the Cabinet is said to plan the meeting today, though it can fail to take place due to escalating tension in the budget talks.
As for the US dollar, it seems that the greenback has not shown a dramatic reaction to the US Fed meeting, as its results were generally expected by the market. In particular, the regulator raised the interest rate by 0.25% to 2.25% and made it clear that the players should wait for one more increase in 2018 and three revisions next year.