Euro Higher On Italy Budget News
19 December 2018 - 4:25PM
RTTF2
The euro climbed against its major counterparts in the early
European session on Wednesday, after Italian government struck a
technical agreement with the European Commission over its 2019
budget plan, ending a standoff between Rome and Brussels about
deficit limit.
On Tuesday, Italy's Economy Ministry announced that an informal
agreement had been made with the European Commission over its
budget plan.
The deal is expected to be formalized on Wednesday at a meeting
of EU commissioners in Brussels.
Prime Minister Giuseppe Conte said that "it is necessary to wait
for the procedure to be completed in order to consider the
negotiation definitively concluded." Conte will address the Italian
parliament on Wednesday.
Data from the Federal Statistical Office showed that Germany's
producer price inflation remained at its highest level in 19 months
in November.
Producer prices rose 3.3 percent year-on-year in November, same
as in October. Economists had expected a 3.1 percent increase. The
pace of increase was the fastest since April 2017, when producer
prices rose at the same rate. The currency rose against its major
counterparts in the Asian session, with the exception of the
pound.
The euro firmed to a 9-day high of 1.1405 against the greenback,
from a low of 1.1359 hit at 5:00 pm ET. On the upside, 1.16 is
likely seen as the next resistance for the euro.
The single currency advanced to a 2-day high of 128.20 against
the yen, reversing from a low of 127.71 touched at 7:00 pm ET. The
euro is poised to find resistance around the 130.00 mark.
Data from the Ministry of Finance showed that Japan recorded a
merchandise trade deficit of 737.3 billion yen in November.
That missed forecasts for a deficit of 630.0 billion yen
following the 450.1 billion yen shortfall in October.
The euro climbed to 1.1311 against the franc, its highest since
December 6. Next key resistance for the euro is possibly seen
around the 1.15 level.
Having dropped to 0.8982 against the pound at 5:15 pm ET, the
euro reversed direction and strengthened to 0.9010. The next
possible resistance for the euro is seen around the 0.91 level.
The euro appreciated to 1.5377 against the loonie, a level
unseen since July 25. If the euro rises further, 1.55 is likely
seen as its next resistance level.
The euro rose to 1.5853 against the aussie and 1.6626 against
the kiwi, from its early lows of 1.5806 and 1.6569, respectively.
The euro is seen finding resistance around 1.60 against the aussie
and 1.68 against the kiwi.
Looking ahead, Canada CPI and U.S. existing home sales for
November are set for release in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate.
The central bank is expected to raise its interest rate by a
quarter-point to a range of 2.25 percent to 2.5 percent.
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