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Euro rises to a two-week high, supported by Italy and oil

100 and 200 Euro banknotes in Vienna – Photo from Reuters Archive

LONDON (Reuters) – On Monday, the euro climbed to a two-week high, as risk appetite rose amid rising oil prices and confirmed reports that Italy could reduce its budget deficit to reassure the EU.

The events in Italy and the news of the UK-EU separation agreement helped the European currency to overcome the effects of disappointing data on the mood of German corporations.

The pound rose by about a third percent to $ 1.2880 after the Sunday agreement on Britain’s withdrawal from the European Union, but the currency gain was limited by doubts about Prime Minister Theresa May’s ability to approve the agreement in a divided parliament.

The single currency rose by almost a third percent to $ 1.1368 and rose 0.5 percent to 128.65 yen. The euro climbed to a two-week high against the dollar at 1.1472 dollars last week.

Italy may reduce the budget deficit next year to 2 percent of gross domestic product (GDP) to avoid punitive measures from Brussels, the government said on Monday.

The dollar index, which tracks the performance of the US dollar against a basket of major currencies, fell 0.2 percent to 96.73.

In another sign of investor risk appetite, the yen was trading at 113.18 yen per dollar, which is 0.2% lower than the dollar, while the Australian dollar rose by half a percentage point to 0.7261 against 0.7202 last week.

The Norwegian krone was supported by the recovery in oil prices, increasing by 0.5 percent to 8.55 kronor per dollar.

Prepared by Abdel Monim Darrarom for the Arab edition – edited by Ahmed Elhami

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