The euro is about to celebrate its 20th birthday, but the countries that use it are still wrestling over how the shared currency should work and how to fix flaws exposed by the debt crisis that marred its second decade.
The euro clawed itself off recent lows on Monday as the dollar paused near 18-month highs and traders waited to see whether the U.S. Federal Reserve’s policy meeting this week would calm nerves about slowing global economic growth.
There is no danger that Italy will abandon the euro as that would be suicidal but Rome’s disregard for European Union budget rules “will have consequences”, European Commission President Jean-Claude Juncker said in remarks broadcast on Friday.
The euro to US dollar exchange rate fell to its lowest level since last November amid new political uncertainties in southern Europe, which occurred also against the backdrop of eurozone growth slowdown since the beginning of 2018.
The European Union plans to switch to the euro for oil purchases from Iran, eliminating the US dollar as the two sides work to protect bilateral trade against possible American sanctions, a report said.
The euro held its gains on Monday as traders bet the European Central Bank will start to wind down its crisis-era stimulus program, while lower expectations for further tightening in the United States weighed on the dollar.
Some European exporters are beginning to worry about the strengthening euro which has rebounded from near parity with the dollar after Donald Trump's election, though analysts see little immediate risk to growth.