Italy announced fresh austerity measures including raising taxes and increasing the pension age to shore up the country's strained finances, but investors remained worried about the euro zone's financial and political stability. Currency market players are also reluctant to make big bets as the year-end is approaching, dealers and analysts said. Later on Monday, French President Nicolas Sarkozy and German Chancellor Angela Merkel meet to outline joint proposals for more coercive budget discipline in the euro zone, which they want all 27 EU leaders to approve at Friday's summit. The focus at the summit will be squarely on new rules to tighten fiscal integration. An agreement could pave the way for an accelerated implementation of the euro zone's rescue scheme to help ensure debt-ridden countries have a vehicle to tap for funds while encouraging bondholders to buy euro zone bonds. While guarded hope supported the euro, dealers and analysts said that does not necessarily mean further rises in emerging Asian currencies and other riskier assets. "We will get an announcement of some fiscal compact and the ECB will respond positively to that," said Thio Chin Loo, a currency strategist with BNP Paribas in Singapore, adding the regional units are expected to remain in recent ranges rather than rising more. "We've seen no interest from specs to take large positions ahead of the year-end. Interbank players are winding down into year end. Scepticism on a EU solution remains high, but even the bears are taking a back seat for the moment." Reflecting that view, investors took profits from gains in emerging Asian currencies rather than add more bets, with some doubting there will be significant progress at the summit. European policymakers have disappointed investors many times in the past. "Everyone needs to see the bazooka before they go all out risk on," said a European bank dealer in Singapore. Last week, emerging Asian currencies enjoyed their first weekly gains since late October, buoyed by the joint central bank actions. RINGGIT Short-covering lifted dollar/ringgit and some speculators added long positions amid doubt over more progress in the European summit. The pair has support at the session's low of 3.1260, near the top of daily Ichimoku cloud. A Kuala Lumpur-based dealer said he does not see reasons to add risks for now, although the market does not appear to have many short positions. RUPEE Dollar/rupee rose on weaker Indian stocks, but investors remained cautious over the central bank's actions to cap its rises. On Saturday, a deputy governor said it would use all available tools to stem a fall in the rupee if the currency's downward spiral escalates and will take steps to keep liquidity in the country's market at comfortable levels. RUPIAH Dollar/rupiah rose in subdued trading. But the Indonesian central bank was spotted selling the pair, dealers said. PHILIPPINE PESO Dollar/peso opened the local market up at 43.35 but the pair gave up the rises on remittance inflows. But the pair found fresh bids from 43.27. The Philippine central bank is prepared to ease monetary policy next year if the economy slows further and if the inflation outlook remains manageable, its governor said. WON Dollar/won fell slightly as some expected the euro to be supported before Friday's EU summit. But South Korean importers bought the pair on dips, while some speculators covered short positions. "The trend is not favourable to build up long positions. But it also looks difficult to add short positions between 1,120-1,130 as we may see short squeezes if it rises to 1,131," said a foreign bank dealer in Seoul.