“The euro strengthened from a seven- week low against the dollar as Italian and Spanish bonds trimmed losses on easing concern that inconclusive elections in Italy will deepen Europe’s debt crisis.
The euro advanced versus 12 of its 16 major counterparts as investors bet the European Central Bank will step in to limit any losses in so-called peripheral bonds following GovernorMario Draghi’s pledge in July to safeguard the currency union. The yen weakened on speculation Japan’s Prime Minister Shinzo Abe will select Haruhiko Kuroda, who favors additional stimulus, as the next central bank governor. South Africa’s rand rose as economic growth quickened.
“The political uncertainty in Italy may be euro negative, but it’s not as bad as what happened inGreece,” said Geoffrey Yu, a senior currency strategist at UBS AG in London. “Draghi’s ‘whatever it takes’ pledge is a strong deterrent to a selloff. The market is not ready to challenge him yet. And those who missed the euro rally, especially versus the yen, are trying to get back in.”
The euro gained 0.2 percent to $1.3089 at 7:20 a.m. New York time after dropping to $1.3018, the weakest level since Jan. 7. The single currency advanced 0.4 percent to 120.37 yen. Japan’s currency fell 0.2 percent to 91.97 per dollar.
The 17-nation currency halted losses from yesterday amid speculation Democratic Party leader Pier Luigi Bersani and resurgent ex-Premier Silvio Berlusconi will seek to avoid a ballot that would favor populist Beppe Grillo, whose movement was the top vote-getter in its first national contest. No formal steps can be taken until a new parliament convenes March 15…”
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