Euro Spikes following latest Italian Budget News

EUR

The Euro bounced from a six-week low against the United States dollar following reports that Italy plans to cut its budget deficit to 2% of GDP in 2021. The Italian budget headlines weighed on the single currency for the past days. Most of the losses came after Claudio Borghi, the economic head of the League party, declared that the country’s problems would be resolved if it readopted the Italian Lira. The EURUSD rebounded from a low of $1.1505 to a high of $1.1593, and the EURCAD rose from a ten-month low of 1.4768 to a high of 1.4857. The single currency will remain vulnerable to the headlines concerning the Italian budget.

USD

The dollar index which measures the greenback against a basket of major currencies finished higher for the fifth consecutive day at 95.48. However, DXY retreated as the Euro strengthened and traded lower at 95.26. The dollar rallied lately supported by the interest rate hike and solid U.S. economic data. Moreover, the demand of the greenback rose as the European risks such as Italy’s budget and the Brexit deal affected the financial markets. The Federal Reserve Chairman Jerome Powell restated yesterday that the economy is strong and the global picture is still positive.

Metals

Gold prices spiked to a two-week high as Italy’s uncertainty boosted the demand for safe-haven. The gold ounce rose from $1187 to test a high of $1208 ahead of the resistance zone near $1214. The price is approaching a downtrend line combining the tops of April 11 and June 14. On the other hand, the silver ounce settled near a five-week high at $14.74.

Oil

Oil prices held steady near a four-year peak as U.S. supply rose. The American Petroleum Institute reported that the U.S. weekly crude inventories rose by 0.907 million barrels last week to a total of 400.9 million barrels. However, the Energy Information Administration will report the official data later today. The West Texas Intermediate crude futures settled at $75.00 per barrel, and the Brent futures settled at $84.59.

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