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Euro mixed in Asia after Italian PM pledge

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(Globalpost/GlobalPost)

The euro was mixed in Asian trading on Tuesday after Italy's new Prime Minister Enrico Letta said his government would act fast to reverse an austerity policy he said was hurting the recession-hit country.

In Tokyo the single currency was slightly weaker against the dollar at $1.3093 from $1.3097 in New York trading on Monday, while it was higher at 128.22 yen against 128.01 yen.

There are growing expectations that the European Central Bank will cut rates this week to counter the recession in the 17-nation eurozone, which may weigh on the euro's value.

Letta, speaking after the weekend formation of a coalition government in Italy ended a political stalemate that had dragged on for months, also called on Europe to become a motor for growth.

"Italy is dying from austerity alone. Growth policies cannot wait," Letta said during his inaugural speech to parliament.

The country, effectively rudderless since an inconclusive election in February, is under pressure to act quickly to tackle social, economic and institutional ills.

Earlier, Letta told parliament that the economic situation in Italy -- hard hit by the eurozone debt crisis -- was "still serious" and its two trillion euro ($2.6 trillion) debt "weighs heavily" on ordinary Italians.

Investors appeared buoyed by the new leadership, with Italy performing well at its first market test, paying significantly lower rates to raise 6.0 billion euros at a five and ten-year bond auction.

But official figures on Monday showed that business confidence dropped sharply this month.

The dollar climbed to 97.94 yen from 97.73 yen as 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 programme.

The Japanese unit's softening comes after the Bank of Japan held off announcing any new policy measures Friday as it wrapped up its first meeting since unveiling a huge stimulus package earlier this month.

The dollar was mostly lower against other major Asian currencies.

The greenback fell to 1.2336 Singapore dollars from 1.2349 in Asian trade on Monday, to 41.13 Philippine pesos from 41.18, to 29.48 Taiwan dollars from 29.57, and to 1,101.23 South Korean won from 1,107.25.

It also lost to 54.18 Indian rupees from 54.33 on Monday and to 9,725 Indonesian rupiah from 9,743, but rose to 29.33 Thai baht from 29.29.

The Australian dollar firmed to $1.0353 from $1.0327 and the Chinese yuan fetched 15.88 yen against 15.85 yen.

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http://www.globalpost.com/dispatch/news/afp/130430/euro-mixed-asia-after-italian-pm-pledge