NEW YORK: The euro pushed higher against the dollar on Monday as Italy's at least temporary settling of its political stalemate boosted confidence in the eurozone.
European markers jumped and sovereign bond yields fell, further helping the euro, after new Prime Minister Enrico Letta cobbled together a fresh coalition government and vowed to reverse Italy's austerity policy.
In addition, modest US economic data shored up the view that the Federal Reserve, beginning a two-day policy meeting on Tuesday, would not alter its huge monetary easing program.
At 2100 GMT, the euro was at $1.3097, up from $1.3029 late Friday.
The euro also pulled higher on the Japanese currency, to 128.01 yen from 127.76 yen, while the dollar slipped to 97.73 yen from 97.99.
The euro's strength came despite rising expectations that the European Central Bank will cut rates this week to counter the recession in the eurozone.
But Kathy Lien of BK Asset Management said such a move is likely already figured into the current market price.
"The euro is trading like it wants more aggressive action from the ECB beyond a rate cut to break below $1.2950," she said.
The British pound gained for the fourth straight session, rising to $1.5498 from $1.5474, its highest level since mid-February.
The dollar slipped to 0.9368 Swiss francs from 0.9425 francs.
<Center><b><i>Copyright AFP (Agence France-Presse), 2013</b></i></center>
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