By FX Empire.com
The EUR/CHF fluctuated heavily on Thursday after the selloff on Wednesday that sent the euro strongly lower. The pair continues to trade with volatility with the focus on the euro area and the debt crisis yet some relief was felt on Thursday though not likely to last long with choppy trading seen ahead as eyes are still on Italy and a critical parliament voter.
The losses endured on Wednesday eased after Germany denied reports saying it is considering a smaller euro area and allowing nations to drop out of the single currency. More support came from Italy which sold 12-month treasuries meeting the target despite the surging yield, as the auction was met with strong market demand.
Greece also helped ease the uncertainty and political strain announcing the new coalition crisis government led by Lucas Papandemos and the new government will be sworn in on Friday at 12:00 GMT.
Friday the parliament in Italy will provide the vote on new measures from asset sales to raising the retirement age to speed the political process and meet the reform target, especially as Italy agreed to IMF and EU monitoring of its progress. The second vote from the House of Deputies is also expected on Saturday and a confidence motion on the measures will soon after see the resignation of Berlusconi as he promised.
Investors will continue to eye the developments in the euro area and especially Italy on Friday and the choppy end of the week trading will be evident, especially as we still do not have political clarity for the next government. Berlusconi’s party softened their insistence for an early election and Mario Monti a former European Commissioner is seemingly the favorite to run a new crisis government, yet still we heard opposition to that option as well.
Originally posted here
