The euro slumped to its weakest level in more than 16 months as investors took a dim view of the political risks gathering over Europe.
The currency fell for a fourth day as traders grappled with news that pressure is mounting on U.K. Prime Minister Theresa May to abandon her Brexit divorce proposal or face defeat in parliament. Meanwhile, the European Commission looked ready to escalate its budget battle with Italy, with officials in Brussels ready to kickstart a disciplinary process.
The euro has slid more than 6 percent this year against the dollar as a combination of political risk and the European Central Bank’s accommodative monetary policy damp appetite for the shared currency. Traders fear that the string of soft economic data may force the Governing Council to lower its economic growth projections at its December meeting.
The euro declined 0.8 percent to $1.1246, its weakest level since June 2017. In focus now for the currency is key technical support at $1.1187, which represents the 61.8% Fibonacci retracement of its gains since early 2017.
In Italy, Deputy Premier Matteo Salvini said Sunday his government could halt European Union budget decisions and other policies if the bloc’s partners continue to show disrespect to his countrymen.