EU Morning Report - Monti to resign

The euro (EUR) is weakening against most of its major counterparts, following an announcement made by Italy’s Prime Minister that he will resign as soon as the as the budget is approved. Italy succeeded in passing various reforms under Monti and he was deemed a credible counterparty by his peers within Eurozone. The succession is going to bring uncertainty and fragile balances in the region’s political scene.

§ The Australian dollar (AUD) recorded a 3-month high at 1.0515 against the US dollar (USD) over the past week, following the release of an improved unemployment rate, a lower than expected Gross Domestic Product (GDP) figure and the decision by the Reserve Bank of Australia (RBA) to lower their lending rate to 3% from 3.25%.

§ The New Zealand dollar (NZD) was also strengthened after the Reserve Bank of New Zealand (RBNZ) decision to leave its lending rate unchanged at 2.5%.

§ The British pound (GBP) appears soft versus the US dollar (USD) as market participants anticipate a speech by the Bank of England (BoE) Governor King at the Economic Club in New York, at 17:15 GMT today.

§ The US dollar (USD) is falling against the Japanese yen (JPY) early in the EU session, even though Japan released a worst than expected 3^rd quarter GDP.

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