Euro higher in Asia as Italy political crisis calms
AFPTOKYO--The euro climbed in Asia Thursday after a bid to topple Italy's government fell apart, while the dollar struggled as the U.S. budget impasse heightened fears of a catastrophic debt default.
October 4, 2013, 12:17 am TWN
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 U.S. trade.
But “the overall sentiment is to sell the dollar on the back of the partial U.S. 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.
The dollar was lower against other Asia-Pacific currencies.
It slipped to 61.87 Indian rupees from 62.46 rupees the previous day, to SG$1.2497 from SG$1.2533, to 31.24 Thai baht from 31.31 baht, to 43.11 Philippine pesos from 43.41 pesos, and to 11,297 Indonesian rupiah from 11,565 rupiah.
It also sank to 1,069.66 South Korean won from 1,074.30 won.
The Australian dollar firmed to 93.82 US cents from 93.69 cents, while the Chinese yuan edged up to 15.98 yen from 15.94 yen.