The euro continued to decline significantly against the US dollar and other currencies amid the aggravation of the political crisis in Italy. Many experts are concerned that the leaders of populist parties will begin a more aggressive struggle in an attempt to form a government, which will lead to even more anti-European sentiments.
The data released in the first half of the day did not support the European currency, although they turned out to be not so bad.
According to the report, the growth of bank lending to companies in the euro area remained at a fairly high level in April, which in the future will necessarily support investments in the monetary union.
So, according to the ECB, lending to companies in April this year increased by 3.3% compared to the same period last year. The level of household lending was also quite good. According to the report, household lending grew by 2.9% in April compared with April 2017. Monetary aggregate M3 of the eurozone in April rose by 3.9% against 3.7% in March. Economists had expected that in April, the M3 unit would grow by 4.0%.
The confidence of French consumers in May did not change. This happened because a number of households were less optimistic about looking to the future and their standard of living.
According to the report of the National Bureau of Statistics of France Insee, the index of consumer confidence in May 2018 remained at 100 points, fully coinciding with the forecast of economists.
As I noted above, the pressure on the euro rose after the Italian president denied the parties "The Five Star Movement" and the "League" in governing the country, which could lead to an increase in populist sentiment in the next election. This, in turn, creates a number of problems for European integration, to which Germany and France have so recently sought.
As for the exchange rate of the European currency, a strong fall is still taking place according to the bearish scenario, which I indicated in my morning forecast.
The Australian dollar fell in the morning after data on consumer confidence, which deteriorated sharply. According to the ANZ-Roy Morgan report, Australia's consumer confidence index fell 3.2%.
Along with this, Secretary of the Treasury of Australia John Fraser said that the economy is gaining momentum, and a strong labor market will promote the growth of wages. However, the statements sounded did not have the desired effect and did not affect the rate of the Australian dollar.