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27 Feb 2013
. Forex Flash: Chaotic euro overshadows positives in the region – ANZ
At the time of writing, inconclusive Italian elections have pushed the euro lower after a rapid rise to start off 2013. According to the ANZ Research Team, “This may run further near-term, but chaotic as it appears, Italy is not Greece. It is forecast to run a primary budget surplus around 5% of GDP this year and is returning to a current account surplus.”
The uneven euro area pick-up with France struggling to recover also weighs on the euro for now. However, “Don’t overlook the fact that major positives are happening in the euro area, not least of which is a return to a sustainable balance of payments surplus, aggregate trend improvement in budget deficits and banking union. A re-run of the 2009-
2012 crises is unlikely though – ultimately we have faith that Italy will sort this political hiatus out and that the euro will resume its uptrend in due course.” the team adds.
The uneven euro area pick-up with France struggling to recover also weighs on the euro for now. However, “Don’t overlook the fact that major positives are happening in the euro area, not least of which is a return to a sustainable balance of payments surplus, aggregate trend improvement in budget deficits and banking union. A re-run of the 2009-
2012 crises is unlikely though – ultimately we have faith that Italy will sort this political hiatus out and that the euro will resume its uptrend in due course.” the team adds.