Home News FOREX-Euro falls after report Italy to cut growth forecast – Kitco News

FOREX-Euro falls after report Italy to cut growth forecast – Kitco News

4 min read

* Fresh Italy growth concerns pressure euro

* Weak German factory data also weighs

* British MPs vote against no-deal Brexit; pound gains

* Focus turns to ECB minutes from March meeting

* Graphic: World FX rates in 2019 (Recasts, adds quote, updates prices)

By Tom Finn

LONDON, April 4 (Reuters) – The euro fell to a session low
on Thursday after a report that Italy will slash its growth
forecasts prompted fears about a broader economic slump.

Political wrangling over the finances of heavily indebted
Italy has seen the euro weaken versus the dollar.

Reuters reported on Wednesday that Rome will this month
likely cut its 2019 growth estimate to 0.3 percent or 0.4

The news was circulating for almost a day before the markets
appeared to react to a Bloomberg report that said the government
is preparing to cut its GDP forecast to 0.1 percent from 1
percent previously.

“The euro stabilized soon after the Italy news triggered an
initial move lower… that suggests that the negative sentiment
towards the Eurozone may be priced in and that the single
currency may have carved out a near-term bottom against the U.S.
dollar,” said Fawad Razaqzada, a market analyst at Forex.com.

The euro was also pressured on Thursday by more signs of
weakness in the German economy. The euro has remained in a range of $1.12-$1.16 in 2019
despite a slowdown in the euro zone economy prompting new
stimulus from the European Central Bank.

The euro was trading at $1.122, flat on the day.
It has fallen in six of the previous eight sessions.

Investors were focused on minutes from the ECB’s March
meeting — especially for details on the ECB’s plans to issue
new cheap loans to banks and a debate about tiering interest

Hopes of a softer British exit from the European Union have
weakened the appeal of defensive assets. The safe-haven yen
touched a two-week low of 111.575 yen against the dollar late on Wednesday.

The lower house of the British parliament on Wednesday
approved legislation that would force Prime Minister Theresa May
to seek a Brexit delay to prevent a departure on April 12
without a deal. The pound last stood at $1.3160 , up 0.2 percent on
the day.

Positive risk sentiment this week has helped boost the
commodity-linked Australian and New Zealand dollars.

(Reporting by Tom Finn, editing by Larry King, William Maclean)


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