The euro traded 0.2 percent from the lowest in six weeks before Italy’s parliamentary election starts this weekend. Australia’s dollar rose after the Reserve Bank signaled it will refrain from rapid interest-rate cuts.
The 17-nation euro headed for a third weekly loss ahead of the Feb. 24-25 voting, with opinion polls showing former premier Silvio Berlusconi closing a gap with front-runner Pier Luigi Bersani. The yen fluctuated amid speculation on who will take the reins at the Bank of Japan. (8301) Japan’s currency headed for its biggest weekly gain in almost four months.
“The Italian election is weighing on the euro,” said Noriaki Murao, managing director of the marketing group at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “If it becomes a close race, it may result in a hung parliament, making it more difficult to push forward with reforms.”
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