The euro declined against its major counterparts in the early New York session on Tuesday, as Italian budget has been rejected by the European Commission and was granted three weeks time to submit a revised plan.
The European Commission stated that the draft budgetary plan constituted serious non-compliance with the fiscal recommendation addressed by the Council in July. Consequently, Italy was told to submit a revised draft budgetary plan within three weeks.
“The Opinion adopted today by the Commission should come as no surprise to anyone, as the Italian Government’s draft budget represents a clear and intentional deviation from the commitments made by Italy last July,” Pierre Moscovivi, Commissioner for Economic and Financial Affairs, Taxation and Customs said.
In July, the Council had recommended Italy to make a structural improvement of 0.6% of GDP. But draft budgetary plan presented by Italy rather provides for a structural deterioration amounting to 0.8% of GDP in 2019, Moscovivi tweeted.
Figures from Destatis showed that Germany’s producer prices rose the fastest pace in a year in September.
Producer prices grew 3.2 percent year-on-year in September, after rising 3.1 percent in the previous month. Economists were looking for a 3.0 percent gain.
The currency has been trading lower against its major opponents in the European session.
The euro fell back to 1.1452 against the greenback, heading to piece a 4-day low of 1.1440 touched at 2:00 am ET. The euro is seen finding support around the 1.12 level.
The euro dropped to 4-day lows of 0.8798 against the pound and 1.1398 against the franc, from its early highs of 0.8845 and 1.1430, respectively. On the downside, 0.86 and 1.12 are possibly seen as the next support levels for the euro against the pound and the franc, respectively.
The common currency hit a 1-1/2-month low of 128.21 against the yen, after rising to 129.38 at 6:30 pm ET. If the euro falls further, it may find support around the 126.00 level.
The euro eased back to 1.5012 against the loonie, from a high of 1.5048 hit at 6:00 am ET. This may be compared to a 4-day low of 1.4995 set at 3:15 am ET. The next possible support for the euro is seen around the 1.48 level.
In today’s events, the Bank of England Governor Mark Carney speaks about artificial intelligence and the world economy at the Annual Machine Learning and the Market for Intelligence Conference in Toronto at 11:20 am ET.
Federal Reserve Bank of Atlanta President Raphael Bostic speaks about the economy and monetary policy at Louisiana State University in Baton Rouge at 1:30 pm ET.