Fresh Italian Elections Appear to be in the Cards
After the big market selloff that took place on Tuesday in reaction to the chaos in Italian politics, it seems that investors are in a wait-and-see mood this morning, waiting for any news. It looks like Italians will be heading to the polls again in July, just a few months after the previous elections back in March. For now, the euro has stabilized. Meanwhile, some market attention was also on the U.S. – China trade tensions, as President Trump goes ahead with plans for more tariffs on Chinese goods.
The euro made most of its move on Tuesday after major markets returned from a long holiday weekend. Euro/dollar plummeted to a 10-month low of 1.1510. Some consolation is expected today. Any negative news out of Italy will provide a catalyst for another leg lower.
The greenback has maintained strength overall, particularly against the euro and sterling, due to investors flocking to the safety of U.S. treasuries as risk appetite waned in the midst of messy Italian politics. However, the release of GDP numbers and ADP jobs data from the U.S. later today could determine the dollar’s direction. Meanwhile the DOW dropped 400 points yesterday.
Loonie in Focus as Bank of Canada meets Today
The BOC holds a policy meeting today and investors will wait to see if interest rates will remain on hold, at 1.25% as is widely expected. The Canadian dollar has been under tremendous pressure this week, reaching its weakest level in 2 months. On the month it has lost 1.4%.