This follows rising concerns over Italy, with Rome proposing a so-called ‘mini-BOT’, an acronym for Mini Bills of Treasury, in an effort to sideline the euro and stimulate the Italian economy. Riccardo Puglisi, an Associate Professor of Economics at the University of Pavia, commented: “It’s a first step to prepare EurExit, so I think it’s extremely dangerous.” In other economic news, the European Union’s finance ministers struck a deal on a common budget for the Eurozone, but skirted the issue of how this decision might be funded. Bruno Le Maire, the French Finance Minister, was upbeat.
He said: “We did tonight what we had set out to do: we’ve created a genuine Eurozone budget.
“For the first time, we have created an operational budget that will help Eurozone countries to converge and become more competitive. It’s a breakthrough.”
Today also saw the publication of the German wholesale price index figures for May, which fell below the expected 2.8 per cent increase to just 1.6 per cent.
These were followed by the French Consumer Price Index figures for May, which also eased to 0.1 per cent, missing the consensus improvement of 0.2 per cent.
The pound, meanwhile, has remained rangebound as Sterling traders focus on the Tory leadership race, with Boris Johnson, remaining in focus as pressure mounts for him to join in TV debates.
Sterling traders will be looking ahead to today’s speech by Mark Carney, the Governor of the Bank of England.
Any dovish stance on the UK’s economy could see the pound begin sink further against the euro.
The pound euro exchange rate will remain sensitive as the Conservative Party leadership race heats up, and with any further controversy surrounding Mr Johnson’s stance on Brexit, this could exacerbate no-deal Brexit fears.