Bloomberg News

Euro Gains as New Governments in Italy, Greece Boost Confidence

November 16, 2011

Nov. 14 (Bloomberg) -- The euro rose for a third day on prospects market confidence in Italy’s ability to contain its debt will be revived after Mario Monti, former European Union competition commissioner, takes over as prime minister.

The 17-nation currency advanced against the yen after Greece’s finance minister said his priority is to ensure the country receives a sixth loan under a EU-led bailout after Prime Minister Lucas Papademos took charge as head of a new interim government. The yen declined versus the Australian and New Zealand currencies as futures signaled Asian stocks will advance, boosting demand for higher-yielding assets.

“We’re seen a more positive start to the week with the new technocrat governments in Italy and Greece, but there’s still a lot of uncertainty,” said Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney. “We’ll try and test to the upside for the euro and the Aussie.”

The euro rose 0.3 percent to $1.3791 as of 6:33 a.m. in Tokyo from $1.3750 on Nov. 11. Europe’s shared currency climbed 0.3 percent to 106.44. The dollar traded unchanged at 77.20 yen.

Italian President Giorgio Napolitano offered Monti the post after sounding out the country’s political parties for their support in consultations yesterday.

Monti must present the names of his Cabinet ministers to Napolitano before he can be sworn in. He will then face confidence votes in both houses of parliament. Leaders of Prime Minister Silvio Berlusconi’s People of Liberty party earlier yesterday told Napolitano that they’ll support a Monti government, virtually ensuring his confirmation in parliament, which may come this week.

--Editor: Garfield Reynolds

To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net;

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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