Italian PM to resign causing fresh uncertainty for the Euro

Italian PM Martio Monti is planning to resign once the 2013 budget has gone through after parliamentary opposition from his allies who had previously backed the government. The former Prime Minister, Silvio Berlusconi, is intending to run for PM once again.

This news has created a new chapter of uncertainty for the euro with the possibility of higher Italian bond yields which is weakening the currency. The chance that Berlusconi might return to PM poses a threat for Italy's finances and has led investors to be cautious about buying the euro.

The euro slid versus most of its counterparts as it dropped to a two-week low down 0.24% against the dollar and 0.2% against the yen.

This political turmoil is weighing on market sentiment as a whole and we are also seeing a drop for both the AUD/USD and GBP/USD.

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