Today is shaping up to be a bit shaky for the European single currency as Italy is gearing down for a vote of no-confidence against the government. It is widely expected that today in the afternoon the Italian PM Giuseppe Conte will announce he is stepping down from the post, and that the government will lose the vote in the evening.
As of now, it is not certain what would happen if the government is overthrown. Conte’s opponents have been pushing the idea of preliminary elections. However, the President also has the right to invite Parliament to try forming a new coalition government, saving both time and money that would otherwise go for funding another election. Analysts are seeing a possible alignment between the 5-Star Movement and the Democratic Party.
In addition, the euro was also shaken by negative news from Germany. The Bundesbank predicted that the German economy has shrunk in the second quarter of 2019, as it did in Q1, which officially puts Germany in a recession.
During the night the EUR sank to $1.1079 against the US dollar and may sink as low as 1.1066 throughout the day.
