On Monday, the main currency pair is trading upwards, but it may not last long.
EURUSD is recovering quite well on Monday morning. The current quote for the instrument is 1.1690.
The European currency stability is coming from weakening of the risks from Italy. Recently, Sergio Mattarella, the President of Italy, has refused to approve the assignment of Paolo Savona as the country’s Minister of Economy and Finances. The Euro investors breathed a sigh of relief: Savona is known as a politician, who is against the Euro, so he might easily complicate the situation EURUSD is in right now.
On the other hand, the “Spanish factor” should be also taken into account. This refers to public confidence in the country’s government: there are rumors on the market about possibility of vote of non-confidence to Italian Prime Minister, Mariano Rajoy, due to the corruption scandal relating to the People's Party, which is led by Rajoy. The case, which involved 29 people from the party, is already closed with prison sentences and monetary penalties announced. However, the fact that the most of accusations were connected with money laundering and financial fraud seems very negative for the party of power.
Rajoy himself already told that he wasn’t going to leave his position voluntarily and his party would appeal against fine sanctions ordered by the court.
However, the problem may be much more complicated than meets the eye. The corruption scandal may revive the Catalan crisis and this time the opposition will have more “ace up its sleeves”: lack of confidence in the government and increasing financial load upon the region. For the Euro, it’s not good at all.
Today’s macroeconomic calendar is almost empty; the USA have a holiday and other countries provide almost no significant data.
RoboForex Analytical Department