Euro Near 7-Week Low as Italy Sells Bonds After Vote

The euro fell toward a seven-week low against the dollar before Italy sells bonds today after the nation’s inconclusive elections sparked the biggest advance in sovereign yields in 14 months.

The euro is heading for its first monthly loss since July as European Central Bank President Mario Draghi prepares to give a speech in Munich. This week’s vote in Italy produced a hung parliament, creating the risk of another election later this year and a retreat from austerity measures imposed to stem the debt crisis. The euro fell toward a seven-week low against the dollar before Italy sells bonds today after the nation’s inconclusive elections sparked the biggest advance in sovereign yields in 14 months.

 “These Italian elections are further evidence that Europeans are a bit over this whole austerity phase,” said Stan Shamu, a markets strategist with IG Markets Ltd. in Melbourne. “If we continue to see yields -- particularly in Italy -- spike higher, then that would be a further negative for the euro.”

The euro slid 0.1 percent to $1.3047 as of 10:31 a.m. in Tokyo from yesterday, when it fell as low as $1.3018, the least since Jan. 7. The single currency lost 0.4 percent to 119.69 yen. Japan’s currency rose 0.3 percent to 91.72 per dollar after earlier falling as much as 0.3 percent.

The euro is poised to fall 3.9 percent this month, snapping six months of gains.