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EUR Recovers Italy-Inspired Losses Pre-Close


The single currency tumbled just after the London close as wires confirmed that Italy's Renzi was pulling ministers from the governing coalition, raising the risk of early elections in the country. EUR/USD slipped to touch 1.2140 in the immediate response, before recovering off the lows as Renzi stated he doesn't believe there will be new elections as a result.

The greenback clawed back some of the recently lost ground, but the USD index made no sincere attempt on the Tuesday highs. December CPI data was ineffectual, with inflation all inline with expectations.

Markets responded to the Riksbank's decision to start a transition to a fully financed FX reserve resulted in broad-based SEK weakness, prompting a EUR/SEK rally up to the 50-dma at 10.1645.

Focus Thursday turns to Chinese trade balance, US weekly jobless claims and further Fed speakers including Rosengren, Bostic Powell and Kaplan.

MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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