The common currency Euro had earlier surged against the US Dollar on Monday and is poised to record its largest 1-day rise versus the Swiss Franc on what analysts are calling a relief rally. Plans for anti-establishment parties to form a government in Italy have failed to come to fruition. Later today, the Italian President is expected to ask a former IMF official to assist in spearheading a stopgap government. Analysts have doubts that the rally will be sustainable but FX markets were relieve that they wouldn't have to face a Euro-sceptic government.
As reported at 11:24 am (BST) in London, the EUR/USD was trading at $1.1642, down 0.07% and well off the earlier peak of $1.17300 while the session low is set at $1.16392. The EUR/CHF is trading at 1.156 Swiss Francs, a gain of 0.27% and off the session high of 1.16286; the low for the session is at 1.15279 Swiss Francs.
Political Uncertainty Will Weigh on Euro
The Euro has come under some heavy sell pressure in recent weeks, largely attributed to the US Dollar rally and the increasing gap between Germany's sovereign debt and Italy's. One strategist said that because there will likely soon be elections in Italy which will weigh on the Italian economy, the political uncertainty there will drag on.