EUR/USD Exchange Rate Flat as Italian PM Conte’s Possible Resignation in Spotlight
The Euro US Dollar (EUR/USD) exchange rate held steady at $1.107 today, as Italian Prime Minister Giuseppe Conte may face removal as Deputy Prime Minister, and leader of the League, Matteo Salvini could push for a no-confidence vote in the Government.
As Mr Salvini – a prominent Eurosceptic – hopes to push for a general election, which could benefit his party the League along with other right-wing allies, this has left many Euro traders cautious.
This comes following a breakup between the League and the 5-Star Movement, amid heated comments from the party’s founder, Beppe Grillo, who called Salvini an ‘untrustworthy traitor’.
If the Italian Prime Minister resigns today, we could see the Euro fall as fears of Italy’s exiting from the European Union would become more likely. This could also allow the Eurosceptic League could step up as a leading party.
Both political and economic woes are preventing the European currency from making any gains against the US Dollar today, as fears mount over the Eurozone’s economy after yesterday’s inflation figures hit a 2-year low.
USD/EUR Exchange Rate Rangebound as Trump Calls for Big Fed Rate Cut
The US Dollar (USD) remained steady against the single currency after yesterday’s call from US President Donald Trump for a big rate cut from the Federal Reserve, in which he said Jerome Powell, the Fed Chairman, had a ‘horrendous lack of vision’.
Our Economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to “will” the Economy to be bad for purposes of the 2020 Election. Very Selfish! Our dollar is so strong that it is sadly hurting other parts of the world…
— Donald J. Trump (@realDonaldTrump) August 19, 2019
Meanwhile, US-China trade tensions are remaining in focus for many ‘Greenback’ traders today.
A deal emerging between the two superpowers now appears more unlikely, following a statement from the Communist Party-run People’s Daily:
‘Making a fuss about Hong Kong will not be helpful to economic and trade negotiations between China and the US. They would be naive in thinking China would make concessions if they played the Hong Kong card.’
These comments follow Donald Trump’s comments that a trade deal between the US and China could be prevented if Beijing used violence against protests in Hong Kong.
EUR/USD Outlook: Federal Open Market Committee’s Minutes in Focus
US Dollar investors will be looking ahead to tomorrow’s minutes from The Federal Open Market Committee.
Any dovish comments about the health of the US economy could see the ‘Greenback’ begin to fall against the single currency.
Tomorrow will also see the publication of the US existing home sales figure for July, which is expected to improve from 5.27 million to 5.40 million.
Euro traders will be looking ahead to Thursday’s publication of the flash German and Eurozone PMIs for August.
Meanwhile, the EUR/USD exchange rate is likely to remain subdued as European political developments both in Italy and the UK will remain in focus.