Recent EUR movement has seen the currency slip, particularly against the GBP and USD. In August of this year, the currency was experiencing the best levels seen since September 2017 against GBP, but has since seen movement of around 4 cents against it.
|Currency Pair||% Change in 1 month||Difference on £200,000|
EUR/USD is one of the most globally traded currency pairings and is experiencing a similar poor run of form, with current interbank levels just below 1.14. This has been a rare occurrence over the last 12 months.
The recent negative EUR movement has largely been influenced by the on-going Brexit developments and the domestic economic issues coming from Italy, in addition to trade pressures that have been imposed by US President, Donald Trump.
This year, the US President has continued to impose tariffs on EU imported goods in order to promote production within the United States, and trade between the newly reformed USMCA (United States Mexico Canada Agreement).
There appear to be new fears coming from Brussels about Trump's intentions to target the most valuable part of the European Auto sector; the manufacturing of engine components, as this would likely add further pressure to the euro.
Italian public debt currently stands at 131%, which is the second highest in the EU. As one of the top 10 largest global economies, this appears to be putting pressure on the Eurozone and the single currency.
Last month, the EU commission rejected the country's budget draft for 2019, and consequently the Italian Government must submit a new proposal by Tuesday and wait to hear Brussels’ next verdict on the 21st, which is when the commission delivers an assessment of the budgets for all EU members.
Following the submission, if reports suggest that the new budget proposal could get rejected, there would be reason to believe that sentiment in the EUR might weaken and the currency could lose further ground later in the week.