The dollar pared losses against the euro on Monday after Italian exit polls indicated that Silvio Berlusconi’s center-right party won the most votes in the Senate. During U.S. morning trade, the dollar pulled back from session lows against the euro, with EUR/USD up 0.05% at 1.3195, off an earlier high of 1.3318. Initial data showed Berlusconi’s center-right party with 31.7% of the votes in the Senate race, ahead of the center-left Democratic Party, which received 29.5%. Outgoing Prime Minister Mario Monti’s centrist coalition received just 8.5% of the votes, well below expectations. Government officials began counting votes after polls closed at 3pm local time and preliminary results were expected by Tuesday. The dollar was trading close to 33-month highs against the yen, with USD/JPY up 0.49% to 93.81. The yen weakened broadly on Monday following reports that Japan‚Äôs prime minister is planning to nominate a strongly pro-easing candidate for the post of Bank of Japan governor. Japanese government officials said Prime Minister Shinzo Abe plans to nominate Asian Development Bank head Haruhiko Kuroda, as the next governor of the BoJ. The greenback was almost unchanged against the Swiss franc, with USD/CHF dipping 0.01% to 0.9297. The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.56% to an eight-month high of 1.0260, AUD/USD down 0.39% to 1.0280 and NZD/USD unchanged at 0.8377. The Australian dollar hit session lows earlier Monday after data showed that China’s HSBC flash manufacturing index dropped to a four month low of 50.4 from 52.3 in January, fuelling concerns over the recovery in the world’s second largest economy.
EasyForexNews Research Team