Elections in Italy…Again? Another Euro Crisis?

The euro resumes its tumble against the dollar this morning while Italian bonds and stocks decline. Italy’s President Sergio Mattarella rejected the appointment of a euroskeptic candidate for economy minister and put in place a new Prime Minister on Monday, asking him to form a new government. EUR/USD plunged below the key $1.16 level. Italian bank stocks were particularly hit hard. Even Spain is contributing to the euro’s decline as its Prime Minister Mariano Rajoy faces a vote of no confidence on Friday.

Crude oil has wiped out all of its gains made in May and has dropped rapidly on expectations of an increase in output levels by OPEC and Russia. WTI is now trading in the $66 a barrel level. Just last week the commodity was trading above $72. The Canadian dollar has been hit hard due to the drop in oil prices, since the loonie is a commodity price linked currency.