Euro remains near multi-month lows amid growing political crisis in Italy

TOKYO, May 30 (Reuters) – The euro was held near the multi-month lows against major counterparts on Wednesday, as the intensification of the political crisis in Italy provoked the possibility of early elections, which, as some market players fear, could lead to the formation of a Eurosceptic government in Rome.

According to sources close to a number of major Italian political parties, it was likely that Italian President Sergio Mattarella could dissolve the parliament in the next few days and send the population to the polls on July 29.

The euro, which dropped to a minimum of 10 months on Tuesday at $ 1.1510, edged up by 0.13 percent to $ 1.1555 on Wednesday, 9.09, but it showed slow moving dynamics in Asia. Since the beginning of the month, the single European currency has lost about 4.5 percent.

The yield of 10-year Italian government bonds jumped to 3.19 percent. And the yield of two-year bonds – up to 2.71 percent from 0.84 percent the day before.

The euro lost 1.0 percent to the Swiss franc on Tuesday, showing the maximum one-day decline since September. On Wednesday, the euro partially won back losses, rising by 0.3 percent to 1.1473 francs.

By the yen, the euro rose by 0.16 percent to 125.71 yen after falling to 11-month low at 124.62 yen.

The dollar gained 0.06 percent against the yen, rising to 108.80 yen.

The dollar index, which tracks the dynamics of the US currency to the basket of six major currencies, slipped by 0.07 percent, dropping to 94.776.