On late-Friday, the US-based Fitch Rating, in its latest credit review report, affirmed Italy's credit rating unchanged at BBB while maintaining a negative outlook.
“This week's political developments reinforce our assessment at the previous review that the government was unlikely to see out a full term and there is an increasing risk of an early election from the second half of this year.
There are downside risks to the fiscal outlook should a future government opt to disengage from EU fiscal rules and be more willing to risk financial market instability.”
Amid increased Italian political uncertainty and calls for a fresh election, as early as October, the shared currency stood resilient on Friday, with EUR/USD having managed to hold above the key 1.1177 support. The spot settled the week just a few pips shy of the 1.12 handle.
In the week ahead, the EUR/USD pair will remain at the mercy of the Italian political risks, as the German and Eurozone Preliminary GDP data will headline amid lingering US-China trade tensions.