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30 Sep 2013
Flash: UER/USD risk factors - BTMU
FXstreet.com (London) - Derek Halpenny at The Bank of Tokyo-Mitsubishi UFJ said the EUR/USD rate is broadly stable and the dollar is not as weak as versus the yen as investors understand the building events risk in the euro-zone as well.
"While the US government shutdown is key, the impending collapse of the Italian government is curtailing euro buying versus the dollar".
"Berlusconi’s attempt to bring down the government by pulling his ministers out of the coalition prompted PM Letta to call for a confidence vote, which will take place on Wednesday. PM Letta appears to be gambling on splitting the PdL with many now questioning the support Berlusconi has within his own ranks".
"Political uncertainty has also increased in Portugal with local election results from yesterday showing a drubbing for the government. The Socialist opposition on current results has 40.5% of the vote compared to 23.7% in 2009. Any EUR/USD buying on a US government shutdown is unlikely to be sustained".
"While the US government shutdown is key, the impending collapse of the Italian government is curtailing euro buying versus the dollar".
"Berlusconi’s attempt to bring down the government by pulling his ministers out of the coalition prompted PM Letta to call for a confidence vote, which will take place on Wednesday. PM Letta appears to be gambling on splitting the PdL with many now questioning the support Berlusconi has within his own ranks".
"Political uncertainty has also increased in Portugal with local election results from yesterday showing a drubbing for the government. The Socialist opposition on current results has 40.5% of the vote compared to 23.7% in 2009. Any EUR/USD buying on a US government shutdown is unlikely to be sustained".