Commonwealth Bank of Australia's senior FX strategist, Elias Haddad, spoke to Bloomberg TV earlier
- Likelihood of early elections in Italy has helped trigger relief rally in euro
- Because there could be a new govt which is more fiscally responsible
- And also likelihood of a less euroskeptic govt
- But a bit too soon to tell how the political dynamic in Italy will unfold
- The uncertainty remains elevated, so there is limited upside for the euro
- There's also political uncertainty in Spain to "add to the mix"
Pretty much right on point I reckon. It's too early to tell how things in Italy will pan out, because we might just end up back in a situation where we'll see another gridlock with Five Star and Lega looking to secure a government once again.
If the electoral law remains unchanged heading into the next elections, a similar scenario as the one now is the most likely outcome.
EUR/USD is now back under 1.1700 again having failed a break of the 100-hour MA as pointed out earlier here, with the dollar also gaining a little across the board.
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