Euro hit by Italian comments

The comments on Friday morning by Italian welfare minister Roberto Maroni that Italy should return to dual circulation of the lira and the euro sent the euro down to $1.2233 in relation to the US dollar.

This result reflects continuing worries about the stability of the eurozone in the wake of this week’s setbacks for the European Union constitution.

It later recovered somewhat, to $1.2280 in anticipation of US jobs data and the release of May’s eurozone service sector purchasing managers’ index.

The index rose from 52.8 in April to 53.5 in May, surprising analysts who had expected a downturn.

Germany’s figures for the sector hit a nine-month high, while Italy’s service sector fell to its lowest level since January of 1998. The overall figures belied the assumption that the eurozone is headed for a recession.

Despite the optimistic news from the service sector, the euro was down ¥0.4 to ¥132.51 in relation to the yen and itlost 0.1 centime compared to the Swiss franc, to SFr 1.5342. Sterling also fell in relation to the yen, down ¥0.45 to ¥196.05.

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