adminTOKYO. – The euro climbed in Asia yesterday after a bid to topple Italy’s government fell apart, while the dollar struggled as the US budget impasse heightened fears of a catastrophic debt default.
The European single currency bought US$1,3609 in late Tokyo afternoon trade, from US$1,3580 in New York where it hit an eight-month high against the dollar.
The euro was also stronger against the yen, at 133,16 yen from 132,21.
Bucking its downward trend against other Asia-Pacific currencies, the dollar climbed to 97,83 yen, from 97,34 yen in US trade.
But “the overall sentiment is to sell the dollar on the back of the partial US government shutdown,” one trader said.
The euro jumped after former Italian prime minister Silvio Berlusconi abandoned his bid to topple Enrico Letta’s government, in a humiliating climbdown after key allies rebelled against his leadership.
The move averted a political crisis and restored a measure of stability in a nation struggling to put its public finances in order.
As the Bank of Japan kicked off a two-day policy meeting, the European Central Bank on Wednesday held key rates at all-time lows of 0,50 percent while it promised to do everything possible to prevent tightening market conditions from choking off a recovery.
“The eurozone recovery is expected to continue, which lowers the risk for (the ECB) to consider a more aggressive monetary policy stance in the very short-term,” Credit Agricole said. – AFP.
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