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Euro dips on Italian debt worries and trade tensions

Euro dips on Italian debt worries and trade tensions

The euro dipped today as investors nervous about trade tensions bought into the safe-haven dollar and fretted that political risks in Europe remain high.

This is despite the fact that pro-Europe parties won a majority of European parliamentary seats.

Remarks by two euro zone officials that the European Commission was likely to fine Italy on June 5, because its rising debt and structural deficits break European Union rules, also weighed on the single currency.

Pro-Europe parties kept a majority of seats in last week’s European parliamentary elections. Support grew for eurosceptic and right-wing parties, but not as much as investors had feared.

European leaders now meet in Brussels to fill in a number of top EU posts, from the head of the European Commission to the European Central Bank.

Currency markets remain in tight ranges without new catalysts and amid uncertainty over how trade tensions between the US and China are affecting the world’s major economies.

The euro slipped 0.1% to $1.1179 as the euro’s initial gains after the EU election results were fleeting.

The dollar rose 0.2% against a basket of peers, but it remains off a two-year high of 98.371 hit on Thursday.

Sterling slipped 0.1% to $1.2671 as candidates to succeed British Prime Minister Theresa May laid out some of their Brexit plans.

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