Euro Remains Pressured by Italy's Budget Crisis
Euro continues to fall versus US dollar. Today, the EUR/USD pair is trading at 1.1521 level, having lost another 0.50% on the day. The single currency is at its lowest level since mid-August, as it struggles to stay above the 1.15 level. Last week, the euro lost 1.2%. Still, the future of the euro remains unclear, as the currency is pressured by Italian budget crisis.
A war of words between the EU and Italy over its budget plan escalated on Monday, as Brussels reminded the government in Rome that its proposal must meet the bloc's rules. Italy's budget proposal has bred market anxiety and sparked fears of an Italian debt crisis. The country's public debt stands at 132% of gross domestic product, the second-highest debt-to-GDP ratio in the Eurozone. The budget increases spending and cuts taxes and sets the budget deficit at 2.4% for 2019, 2020 and 2021.
According to today’s data, Eurozone producer prices rose more-than-expected in August, as a result of the rising cost of more expensive energy. The Eurostat reported that producer prices in the Eurozone rose by 0.3% mom in August, compared with market expectations of a 0.2% gain. On an annualized basis, producer prices rose by 4.2% in August, compared to market expectations of growth of 3.9%.