Mario Monti Set to Resign in Italy; Euro Slips, But Recovers

Euro slipped earlier today on the Forex market, thanks to the latest political turmoil in Italy. However, the 17-nation currency has recovered some of its equanimity since then, and is now higher.

Italian Prime Minister Mario Monti announced that he will be resigning after the passage of the 2013 budget. The move sent the Italian stock index tanking, and increased the gap between Italian yields and other bond yields in the eurozone. Initially, the euro took a hit, dropping as low as 1.2886 against the US dollar. Right now, though, the euro has recovered quite a bit, moving above 1.2930.
The news that Monti will step down shook things up a bit in the eurozone, causing a bit of consternation. More than anything, the news underscores that fact that there are still quite a few problems facing the 17-nation currency region. Many of the countries remain mired in debt, and a number of them don’t have the economic strength to overcome the struggles. Indeed, the eurozone itself is in recession, and even powerhouse Germany is flagging a bit.
At 14:40 GMT EUR/USD is up to 1.2932 from the open at 1.2890. EUR/GBP is holding steady at 0.8038, slightly up from the open at 0.8037. EUR/JPY is down to 106.3050 from the open at 106.3750.

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