Italy Woes Threaten Euro
The dollar traded near one-month highs early in Wednesday’s Asian session after comments out of Italy shook the currency markets on Tuesday and the fear crept into Wednesday’s Asian trading session. On Tuesday, Claudio Borghi, an Italian lawmaker, suggested that the euro was the cause of Italy’s economic problems, and that a return to its own national currency would solve the country’s economic crisis. Borghi later attempted to take back his statement, while Italian Prime Minister Giuseppe Conte commented that the euro was “unrenounceable.” The comments did little to restore the euro to its former levels or to restore investor confidence in the region.
The dollar retreated slightly just after noon in Hong Kong, with the dollar index trading down 0.17 percent as of 12:54 p.m. HK/SIN to 95.35 .DXY. European shares traded lower on Tuesday after Borghi’s comments, with the STOXX closing down 0.7 percent. Italy’s 10-year bond yield soared to 4 ½ year highs as well.
Gold Rebounds Slightly
Traders flocked away from the euro to safe-haven assets including gold, which closed over 1 percent higher on Tuesday and was also trading up on Wednesday. Spot gold gained 1.3 percent on Tuesday, its biggest daily gain in over a month. The precious metal was up another 0.23 percent on Wednesday, trading at $1,209.80 per ounce. Silver was up 0.73 percent and copper was up 0.04 percent. Last Thursday gold hit a six-week low of $1,190 per ounce and it saw its sixth-consecutive month of losses in September, its longest losing streak since 1989. Gold is down over 5 percent year to date.