The euro held on to gains in Asian trading after rising late in the North American session on news Italian Prime Minister Silvio Berlusconi will resign once a new package of budget reforms receives parliamentary approval. This brought optimism to investors as a new leader may be better able to tame the nation’s debt crisis. Investors had lost confidence in the Berlusconi government in recent weeks, as Italy’s borrowing costs skyrocketed and bond yields hit record highs. However, Greece has yet to name a new Prime Minister so this is keeping investors holding their breath and EURUSD remained flat all session trading in a 1.3814 – 1.3843 range.
The yen advanced against the majority of its most-traded peers as concern faded that the Bank of Japan will intervene to weaken the currency. USDJPY fell from 77.77 to 77.53, which is the yen’s strongest level since the October 31 BOJ intervention. EURJPY dipped to 107.17 from 107.59.
The Australian dollar slid versus its U.S. and Japanese counterparts ahead of data tomorrow that may show unemployment rose to 5.3 percent in October from 5.2 percent the previous month. AUDUSD declined 0.6 percent from 1.0404 to 1.0344. The aussie was also affected by data from its major trading partner, China. Growth in the world’s second largest economy slowed as consumer prices and industrial production grew at a slower rate. China’s demand for Australia’s commodities and resources is likely to fall, so that is weighing on the AUD.
Gold managed to move up from the New York session close, hitting a high of $1,794.14, almost 1 percent from the previous session low, though it slid to $1,787.34 in Asian markets.