Veiled Threats By Italy's Savona?

Published date: 10/07/2018
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Some pretty inflammatory comments from the Italian minister for European affairs, in that he sees his nation's membership of the EUR as dependant on fellow members. There is a potential collision course developing here as Italy looks to the EU bloc to help with funding. Failure to reach an agreement could see some of the heightened jitters of the prospect of Italy leaving the EU. 

Traders have responded with nonchalance for the most part, as a modest dip under 1.1700 suggests there is little to worry about just yet. However, complacency is a common place these days, and a defensive approach to all EUR pairs should now be anticipated.  This is having a limited impact on the crosses also as EUR/CHF sticks to the mid 1.1600's. This could be down to smoothing operations from the SNB, who make no secret of the fact that they are ready to intervene in the markets in times of volatility.  

EUR/GBP has also moved lower and is testing the base set ahead of 0.8800.  As long as EUR/USD continues to find buyers on dips, which seems to be the case this week, the chances of a push below the figure level looks unlikely given GBP uncertainty over Brexit. 

EUR/JPY is holding above 130.00 for now, with the positive risk mood supporting through USD/JPY.  


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