Asian shares hovered near 2-1/2 week lows and the safe-haven yen rose on Monday amid fears of a global trade war, while the euro pared gains as investors worried Italy’s national elections could deliver an anti-establishment government.
SYDNEY (Reuters) – Asian shares hovered near 2-1/2 week lows and the safe-haven yen rose on Monday amid fears of a global trade war, while the euro pared gains as investors worried Italy’s national elections could deliver an anti-establishment government.
Italy’s poll produced no outright winner on Sunday, according to exit polls that pointed to possible political gridlock, with voters backing anti-establishment and far-right parties in record numbers.
After a see-saw start, the euro eased back to $1.2320 from a two-week high of $1.2365 amid talk the euroskeptic 5-star party could form a coalition government.
Supporting the euro was the revival of Germany’s grand coalition over the weekend, meaning Chancellor Angela Merkel’s conservatives will form a new government more than five months since the country’s inconclusive election.
“The market remains extremely choppy,” said Stephen Innes, head of trading at OANDA.
“The results are initially interpreted as mildly supportive for the euro given the worst case scenario – the anti-establishment coalition in office was averted – but is reversing out the initial wave of positivity,” Innes added.“…the market will look to fade upticks given the political malaise in Italy will play on.”
The yen got a lift from safe-haven flows as risk sentiment soured after U.
