Euro Slips on EU-Italy Budget Battle

EUR

The euro lost ground against rivals as the never-ending budget battle between the European Union and Italy invades the headlines. The common currency drifted lower following comments by two officials that the European Commission will take disciplinary measures against Italy on June 5th as Italy failed to meet the budget rules. In 2018, the euro and major European indices suffered from the clashes between Italian politicians and the European Commission. The EURUSD tumbled to a low of $1.1178, and the EURAUD tested a one-week low of 1.6138. Market participants await a series of indicators for more insight about the effect of the recent economic slowdown on the consumer sentiment.

USD

The dollar index which measures the greenback against a basket of major currencies bounced off a ten-day low of 97.55 to trade higher near 97.84 benefiting from the arising budget clash between the EU and Italy. The index tumbled from a two-year high last week after sluggish economic data, cutting the chances of further policy tightening by the Federal Reserve and clears the way for easing monetary policy. However, Thursday and Friday carry significant economic figures such as the second reading of the first quarter GDP and the PCE report, which would impact the Fed's tone. The US 10-Year yields dipped to 2.299%, and the USDJPY hovered near 109.60.

Metals

Gold prices surrendered partial gains as the dollar regained ground. The price of a gold ounce dipped towards the 100-hour and 200-hour exponential moving average sitting at $1282. The silver ounce settled almost unchanged at $14.55, while palladium remained caught in a range between $1321 and $1344.

Oil

Oil prices edged higher during the Asian session as the trade tensions between China and the United States receded. Currently, several factors are affecting the oil prices among the geopolitical tension between the United States and Iran, OPEC+ supply cuts extension, the global economic growth concerns, and the trade tensions. The West Texas Intermediate crude futures rose to a high of $59.33, and the Brent futures climbed to a high of $70.31.

Major Economic Events

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