The euro edged higher on Monday after a short-lived sell-off tied to Italy’s inconclusive weekend election, helped by the creation of a coalition government in Germany that eased political uncertainty there.
Italy’s election, which pointed to prolonged political jitters after right-wing and eurosceptic parties did better than expected, was somewhat balanced by Germany’s Social Democrats agreeing to join with Chancellor Angela Merkel’s conservatives, ending a period of uncertainty in Europe’s biggest economy.

Taken together, the election outcomes did not to alter investors’ view on the strength of the euro zone economy, although the Italian results put political risks in the region back on the radar.
“All in all, they are neutral to slightly positive for the euro,” said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities in New York.
Bennenbroek and other analysts said traders will turn their focus to four major central bank meetings this week as well as the U.S. payrolls report due Friday.
The Reserve Bank of Australia will meet on Tuesday, while the Bank of Canada will hold a policy meeting on Wednesday. European Central Bank policymakers will convene on Thursday, while their counterparts at the Bank of Japan will meet on Friday.
The euro EUR= was last up 0.09 percent to $1.2328.
via Reuters
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