The dollar fell sharply versus the euro on Friday, paring nearly all of its weekly gains amid hopes that Italy and Greece have made steps to avert a sovereign crisis.
Italian Senate passed austerity measures this morning, clearing the way for Prime Minister Silvio Berlusconi’s departure.
Berlusconi is set to be replaced by former European Commissioner Mario Monti and his group of technocrats. Greece swore in new Prime Minister Lucas Papademos today.
There was little reaction to the day’s only U.S. economic data.
Consumer sentiment in the U.S. has seen a notable improvement in the month of November, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index jumping to a five-month high.
The report showed that the consumer sentiment rose to 64.2 in November from the final October reading of 60.9. Economists had been expecting the index to show a much more modest increase to 61.5.
The dollar fell to near $1.38 versus the euro, having touched a monthly peak of $1.3482 just two days ago.
A fourth day of losses took the dollar to 77.05 versus the yen, drawing closer to last month’s record low Y75.55.
Versus the sterling the dollar dropped to $1.6080 from near $1.5875.
U.K. factory-gate inflation eased to its lowest level in five months in October, as poor consumer demand restricted manufacturers from raising charges. Meanwhile, input cost inflation cooled during the month to its weakest level since December last year.
Data from the Office for National Statistics showed Friday that the output price index for home sales of manufactured products rose 5.7 percent year-on-year in October.