Political scandal helped drive the Canadian loonie higher against the common currency of the European Union on Monday as the third- and fourth-largest economies in the 17-bloc region contend with challenging developments, Bloomberg reports.
Mariano Rajoy, prime minister of Spain, is under fire after a national report indicated he and members of his party accepted bribes. Silvio Berlusconi, former prime minister of Italy who is contending with a four-year tax fraud prison sentence, closed in on the front-runner while appealing that sentence.
“Politics have been an important driver today as corruption allegations against Spanish Prime Minister Rajoy weigh heavily on the political outlook and drive Spanish yields higher,” chief currency strategist Camilla Sutton with Scotia Capital told The Canadian Press on Monday. “In addition, the looming election in Italy continues to make headlines.”
Italy’s economy is the 17-nation bloc’s third-largest while Spain’s registers at fourth.
Policy makers with the European Central Bank are slated to meet this week but no serious policy change is likely, The Canadian Press reports. Some traders are keen on hearing the opinions of President Mario Draghi regarding the euro.
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