The appointment of Carlo Cottarelli, a former International Monetary Fund (IMF) official, to head a temporary, unelected administration will likely be portrayed by populists as a contemptuous slap in the face for ordinary voters.
Cottarelli, 64, will meet with President Sergio Mattarella after talks between the head of state and populist parties on the cusp of forming a new government fell apart over the inclusion of eurosceptic Paolo Savona as economy minister.
Mattarella said that he had requested a candidate for finance minister who "is not seen as a supporter of an often repeated line, which could possibly or even inevitably provoke Italy's exit from the euro".
The greenback was up 0.05 per cent at 109.400 yen after going as high as 109.830 on a slight ebb in risk aversion after U.S. President Donald Trump said on Sunday a U.S. team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un. In a bid to settle markets, he stressed that Italy's economy was growing, its public debt was "under control" and that he assured his government would prioritize "prudent" management of it.
Mattarella said Conte refused to support "any other solution" and then, faced with the president's refusal to approve the choice of Savona, gave up his mandate to be prime minister. Mattarella added: "Now some political forces are asking me to hold elections".
The two parties who had struggled to form a coalition, the far-right League and the 5-Star Movement, have accused Mattarella of abusing his office.
Data last week showed German PMI data fell to a 20-month low in May indicating that economic momentum in Europe's biggest economy was faltering and European Central Bank minutes of its April meeting showed policymakers were anxious about a more pronounced slowdown in the eurozone and political uncertainty in Italy.
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After being named interim prime minister, Cottarelli said he would present a programme that would include the 2019 budget to parliament, and dissolve the assembly if it is approved with new elections held in early 2019.
Foa blasted the decision as "really shocking", as it's becoming quite obvious that the president is not acting in Italy's best interests, but rather in the interests of the European Union which he does not wish to "disturb".
"However, it is far from certain that Mattarella's current move will end Italy's drama". In a statement late Sunday, the three-time premier took a much more measured tone about the collapse of the 5-Star-League experiment, refusing to criticize Mattarella.
The Five Star's Di Maio demanded impeachment under article 90 of the constitution.
"I hope that we can give the floor to Italians as soon as possible, but first we need to clear things up. Some things can not be done in the throes of anger", Salvini said.
Amidst the outrage, the leader of the largely collapsed Democratic Party (PD), Maurizio Martina, voiced his support for Mattarella, saying that his party-widely understood to represent the establishment-was ready "to mobilize a defense of democracy and our institutions" if attacks on the Italian president persist.