Euro Gains From One-Month Low on Optimism Europe

The euro rose from a one-month low versus the dollar amid optimism European leaders are tackling their debt crisis after Italy’s Senate approved an austerity bill yesterday and Greece swore in a new prime minister.

The 17-nation currency pared a weekly loss versus the greenback to 0.3 percent as Italian bonds rose, pushing yields below the 7 percent level that led Greece, Ireland and Portugal to seek bailouts. The euro fell earlier on concern the debt crisis was worsening and before data next week that may show the region’s economic growth stagnated.

“We had one week of good progress, and now hopefully we’ll have technocrats in charge in Greece and Italy,” said Greg Anderson, a senior currency strategist at Citigroup Inc. in New York. “Markets at this point will demand implementation. There’s a lot that needs to be done before the deep underlying fears are resolved.”

The euro declined versus the dollar to $1.3750, from $1.3792 on Nov. 4, after rallying 1.5 percent in the past two days. It touched $1.3484 on Nov. 10, the weakest level since Oct. 10. Europe’s shared currency slid 1.7 percent against the yen to 106.10, its biggest weekly loss since the five days ended Sept. 23.

The Japanese currency gained 1.4 percent to 77.20 per dollar, the most in a week since Aug. 12. The yen rose against all of its 16 most-traded peers after tumbling 3.1 percent last week, the most since April, following the Bank of Japan’s sale of yen on Oct. 31 to weaken the currency. Investors bet this week the nation would refrain from further aggressive steps.
Three-Month Gain

The yen gained 1.9 percent versus nine developed-nation peers over the past three months, according to the Bloomberg Correlation-Weighted Currency Indexes. The dollar climbed 4.1 percent, and the euro rose 0.5 percent.

The euro dropped 2.1 percent on Nov. 9, the most on a closing basis since August 2010, as Italy’s 10-year government bonds fell, pushing up yields to as high as 7.48 percent. The securities slid as LCH Clearnet SA, a clearing house that guarantees investors’ trades are completed, boosted the deposit it demands from clients to trade Italian government bonds.
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