The Euro remained close to the $1.13 level during trade in London on Wednesday as FX traders wait to see how the European Commission responds to Italy's re-submission of its 2019 draft budget. According to reports, with the exception of a decline in the debt level, it maintains similar deficit and growth assumptions. Whether it will be approved by the EC is up for debate and as a result, both bond and currency markets have been rattled by the news. The greater concern is Italy's declining economic outlook could put the process for a tighter monetary policy from the European Central Bank in jeopardy; Italy is the third largest economy in the Eurozone, after Germany and France.
As reported at 11:26 am (GMT) in London, the EUR/USD was trading at $1.1265, down 0.24%; the pair has ranged from $1.12631 to $1.13218 in today's session. The EUR/GBP is trading at 0.8737 Pence, up 0.78%; the pair had earlier struck a peak of 0.87411 Pence while the low is recorded at 0.86674 Pence.
May Showdown in Focus
In the UK, FX traders are preparing for a showdown between the Prime Minister and her party members on the latest Brexit proposal. Analysts say how Conservative party members perceive the draft is likely to be the litmus test for the Parliament as a whole. There is only a little more than four months left before Britain officially withdraws from the European Union and whether the Brexit will be hard or soft one is what is worrying investors. The GBP/USD was trading lower at $1.29, down 0.90%.