US Dollar Erases Gains as Italy Secures Budget Deal, Brexit News Looms

Talking Points:

– Capital flight out of US financial markets seems to be the common theme on the day, with the US Dollar falling alongside US Treasuries and all three major US stock indices.

– Concerns are cropping up about the rise of interest rates, which could choke off growth in all corners of the globe.

Retail traders are quickly neutralizing positioning across USD-pairs, and sentiment is turning ‘mixed’ as a result.

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The US Dollar (via the DXY Index) has seen of all its daily gains erased ahead of the US cash equity open today, thanks to an ongoing rebound in risk appetite on the back of positive news out of Europe. With the Italian government appearing to have secured a budget deal, the Euro has been able to turn higher as Italian BTP yields have dropped.

The news out of Italy is clearly overshadowing whatever other news about the Eurozone developing today; look no further than the lack of reaction to the October ZEW Surveys. The sentiment readings for the Eurozone and Germany came in at or fresh lows

Article source: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/top_fx_headlines/2018/10/16/US-Dollar-Losses-Resume-as-Italy-Secures-Budget-Deal-Brexit-News-Lingers.html