The dollar continued to show a lack of direction versus the euro on Tuesday, where Silvio Berlusconi won a crucial vote on the country’s 2010 budget plan, but failed to secure simple majority in the Parliament.
A report on last year’s budget was passed with 308 MPs voting in favor and 1 abstention on Tuesday. A further 321 lawmakers in the 630-member lower house, including the opposition center-left, boycotted the vote.
With Italian borrowing costs soaring, a no-confidence vote against Berlusconi appears likely. Opposition lawmakers are calling for the long-time PM to step down, but Berlusconi has said he is not considering this outcome.
The dollar battled back from early losses against the euro, returning to a stubborn range near $1.3775.
German exports recorded an unexpected monthly expansion in September, suggesting a moderate contribution to economic growth from trade at the end of second quarter, data from the Federal Statistical Office revealed Tuesday.
Exports climbed 0.9 percent in September from a month ago, while economists were looking for a 0.8 percent fall. However, the increase was weaker than the revised 3.2 percent rise seen in August.
The buck also steadied after early losses versus the sterling, improving to $1.6085 from a weekly low near $1.6110.
U.K. manufacturing output increased in September for the first time since May, but industrial production remained flat indicating that the economy is no longer trending upwards.
Manufacturing output grew by a more-than-expected 0.2 percent from a month ago, but was insufficient to completely reverse a 0.3 percent drop in August, the Office for National Statistics reported Tuesday. Economists had expected only a 0.1 percent rise for September.
The dollar finally broke lower against the yen after seeing virtually no movement in November. The buck slipped to 77.60 from a tight range near Y78, moving back toward October’s record low Y75.55.
Traders will look to Chinese inflation figures tonight, hoping for clues about how the world’s fastest growing economy is holding up.