Euro Steady At $1.36
The euro traded steadily below $1.3602 at 5:15 GMT on Monday morning as investors weighed in on Italian central banker Ignazio Visco's weekend comments.
On Sunday, Reuters reported that Visco told and Italian newspaper that the EU's plans for a banking union are vial for the currency's survival. He remarked that the threat of a eurozone breakup was very real back in 2011, and although much of the problem has been alleviated, the banking union will play a vital role in securing the region's future.
According to Visco, the key to setting up a functioning banking union will be budgetary integration among eurozone members, something many EU members, namely Germany, have been hesitant about.
Visco also spoke about the strength of Italy's banks, saying that the nation still struggled with a large number of non-performing loans. Despite that, Visco was positive about the future and said that the nation's rigorous financial regulation would continue in preparation for the stress tests expected in 2014.
When the European Central Bank takes over as the region's banking regulator, a series of difficult health checks will be carried out to determine the trustworthiness of the region's banks. Some eurozone banks are expected to fail, as ECB Bank President Mario Draghi promised that in order to preserve the reliability of the tests, they must be difficult enough to keep some banks from passing.
Moving forward, investors will be focused on data from the eurozone this week as the ECB's upcoming meeting could result in a policy change that would take the euro lower. The bank unexpectedly lowered its main interest rate at its November meeting and some believe that it could decide to take the deposit rate below zero.
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