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Turmoil in Italy pushes lira to new low

Peter Torday
Friday 02 April 1993 17:02 EST
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THE ITALIAN lira fell to yet another record low against the German mark yesterday after further political turmoil intensified speculative pressure on the currency, writes Peter Torday.

The fall took the lira to 1,005 to the mark at one stage, deepening its depreciation since last September to 30 per cent. Against the pound, the Italian currency weakened by three lira to 2,429.

The latest decline was prompted by squabbling between the political parties apparently undermining attempts by President Scalfaro to form a new government. It followed an outbreak of strikes across the country.

The lira ended around 998.5 to the mark after a recovering dollar pushed the mark lower against other European currencies. A number of currency analysts believe the lira may now be substantially undervalued.

The dollar closed half-a-pfennig higher at DM1.6040, after a reassessment of the latest US employment report, which showed that the growth in American jobs outside the farm sector last month rose by an unexpectedly small 22,000.

The report appeared to provide further evidence that the US recovery may have moderated during the first quarter, but upward revisions to job growth in earlier months tempered any negative impact. The US unemployment rate steadied at 7 per cent.

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