The European Single Currency, euro, on Tuesday, May 8, dropped by half a percent to $1.18620, its lowest levels since late December.
It is already 1 percent lower since the start of the year, a big reversal from 2017 when it notched up double-digit gains against the dollar.
The drop came as President Sergio Mattarella called on Monday for Italy’s bickering parties to rally behind a neutral government. Italy’s two largest parties, the far-right League and anti-establishment 5-Star Movement, came out against the proposal.
The euro fell 0.3 percent against the dollar to $1.1977, the lowest since end-December.
Meanwhile, Dollar gains have rippled through forex markets in recent days, forcing investors to unwind some of this year’s best performing trades – emerging markets.
A sovereign emerging dollar debt index saw spreads over Treasuries at the widest since early-2017, while many currencies touched multi-month lows.
The Turkish lira has plumbed successive record lows, while Argentina was forced last week to raise interest rates to 40 percent to stem peso bleeding
Tech-heavy emerging stocks rose on the day but are down 2 percent this month
