The dollar firmed on Thursday after the euro retreated to a five-month low on concerns political developments in Italy could cause wider disruptions in the euro bloc, while rising U.S. Treasury yields knocked emerging market currencies lower.
The euro was last at $1.1827Â EUR=Â , up 0.15 percent on the day, after sliding overnight to $1.1763, its lowest since Dec. 18. The common currency has shed nearly 1 percent this week.
Political uncertainty in Italy, where populist parties have jostled to forge a common platform in a bid to lead the next government, have been a major drag on the euro.
The euro slid to the five-month low on reports Italy’s anti-establishment 5-Star Movement and anti-immigrant League may ask the European Central Bank to forgive 250 billion euros of debt as the parties worked to draft a coalition programme. euro looks on track for further losses as market participants still appear to have more long positions on the euro to liquidate,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.
