Euro retreats against dollar, Italy and Covid-19 worry

The euro fell against the dollar on Friday, weakened by political tensions in Italy and the slowness of the vaccination plan against Covid-19 in Europe. At around 10:20 a.m. GMT (11:20 a.m. in Paris), the euro lost 0.14% against the dollar, at 1.2138 dollars to the euro. “If the vaccination campaign continues to disappoint, it will continue to weigh on the euro“Warns Derek Halpenny, analyst at MUFG.

Currency traders fear that the slowness of vaccination campaigns compared to the United States or the United Kingdom will lead European countries to keep containment measures for longer, which would weigh on their economies. “Italy is a weight on the euroAdded Stephen Innes, analyst at Axi.

Italy, the third largest economy in the euro zone and the main beneficiary of the European recovery plan, finds itself again in turmoil the day after Matteo Renzi’s decision to withdraw his party from the government coalition.

If the dollar rose against the euro, it retreated slightly against the yen (-0.13% to 103.67 yen per dollar) the day after the announcements of future president Joe Biden on his recovery plan and a statement by US Central Bank (Fed) President Jerome Powell. “Much of the market optimism over a further injection of liquidity into the economy had already been incorporated into pricesCommented Han Tan, analyst at FXTM.

The president of the Fed has for his part “ruled out speculation about a possible decline in the asset buyback programAdds Mr. Tan. The Fed’s massive asset buyback program, adopted to boost the US economy in the face of the Covid-19 pandemic, is weighing on the dollar rate.

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