Forexpros – The euro slipped lower against the U.S. dollar on Wednesday, giving up early gains following the resignation of Italy’s prime minister, amid uncertainty over whether Italy’s new government will be able improve the country’s fiscal situation.
EUR/USD pulled back from 1.3858, the pair’s highest since November 4, to hit 1.3795 during late Asian trade, shedding 0.27%.
The pair was likely to find support at 1.3680, Monday’s low and short-term resistance at 1.3868, the high of November 4.
Late Tuesday, Italian Prime Minister Silvio Berlusconi announced that he would resign after parliament approves next year’s budget. The announcement came after Mr. Berlusconi lost his parliamentary majority during a vote on a budget bill.
But the euro remained under pressure as uncertainty over whether Italy’s new government will be able to shore up growth and implement austerity measures weighed.
In Greece, outgoing Prime Minister George Papandreou was widely expected to name former European Central Bank Vice President Lucas Papademos as prime minister of an interim government later in the day.
The euro was also lower against the pound, with EUR/GBP slipping 0.09% to hit 0.8588.
Also Wednesday, government data showed that China’s annualized rate of consumer price inflation came in broadly in line with expectations in October, slowing to 5.5%, after a 6.1% increase the previous month, easing fears over monetary tightening by Beijing.
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