Euro gains vs dollar on progress in Italy, Greece

AP News
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Posted: Nov 11, 2011 5:10 PM
Euro gains vs dollar on progress in Italy, Greece

The euro rose against the dollar for the second day in a row as Italy and Greece moved closer to getting new leadership. Traders are hoping that the new governments will resolve their respective countries' fiscal problems.

Italy's Senate approved economic reforms Friday that will pave the way for Prime Minister Silvio Berlusconi to resign. Berlusconi promised that he would resign once the reforms passed. A replacement for Berlusconi hasn't been announced yet, but speculation that the respected economist Mario Monti could be Italy's next leader has calmed fears that the country will fall into its own debt crisis.

Worries that Italy was the next country to be dragged into Europe's debt morass pushed the euro to a four-week low against the dollar on Wednesday. The euro has since recovered on hopes that a new leader will push to pass much-needed austerity measures in Italy. Berlusconi was seen as an obstacle to getting those reforms passed.

The euro rose to $1.3747 in late trading Friday from $1.3581 late Thursday.

In Greece, a new prime minister assumed power promising to push economic reforms to keep the country from defaulting on its debt. Lucas Papademos will replace George Papandreou, who resigned after announcing last week that he would put Europe's latest debt deal to a public vote. The announcement shocked European leaders, and Papandreou later reversed his decision.

In other trading, the British pound rose to $1.6060 from $1.5905. The dollar fell to 77.17 Japanese yen from 77.66 Japanese yen, to 0.9021 Swiss franc from 0.9076 Swiss franc and to 1.0133 Canadian dollar from 1.0195 Canadian dollar.

The dollar was also lower against most other currencies around the world, including those in Australia, South Korea, Hong Kong, Brazil and Mexico.