Pressure on emerging currencies mounts as the dollar shifts up a few gears
London — A rebound in Chinese shares and a rally in Italian bonds bolstered Europe’s spirits on Tuesday, though the pressure remained firmly on emerging-market currencies as the dollar shifted up through the gears again. Asian stocks had reversed earlier losses helped by a 1.3% late spurt from Shanghai, though Europe moved back into the red as gains for Italian and Spanish bank shares faded and the major London, Frankfurt and Paris bourses faltered. Italian government bond yields fell back from three-month highs, with investors encouraged by soothing comments from Italian ministers on forthcoming budget proposals. Well-placed sources told Reuters that Rome’s economy minister Giovanni Tria was pushing the governing coalition to keep next year’s budget deficit below 2% of output. Deputy prime minister Matteo Salvini had said on Monday that it would not breach the EU’s 3% limit. "I would say the overall price action is quite encouraging and Salvini’s comments yesterday gave the market ...
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