Monday saw the common currency of the European Union drop in value when compared with the U.S. dollar amid the sale of Italian government bonds on Monday as the nation's new prime minister takes office, according to MarketWatch.
The euro zone's third-biggest economic system now is under the purview of Mario Monti, who was selected over the weekend to fill the vacancy created by the departure of Silvio Berlusconi. Monti finds himself if a situation similar to that of Lucas Papademos, the newly tapped prime minister of Greece. Both nations are enduring damages caused by the sovereign debt crisis.
"While the U.S. economic data has improved, the Greek and Italian political developments have reduced a lot of the tail risk in the euro and suggest short positioning may consequently be reduced," according to a note penned by strategists with Lloyds Bank in London, cited by MarketWatch.
Reuters reports the market initially was supportive of the new administration in Italy but the reality of sharp cuts and economic reforms set in and imparted a caution for the region that has been savaged by the sovereign debt crisis.
Greece is waiting on its second tranche of international aid since June 2010 while Italy – trailing France, the region's second-largest economic power, and top regional economy Germany – is implementing measures as a consequence of the debt crisis' damages.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
