CURRENCIES: Dollar Slips As Euro, Pound Rebound From Political-driven Losses

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Yen rises after renewed political fears in Europe

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The dollar dropped slightly on Tuesday, as the pound and euro rebounded after recent losses driven by political uncertainty in Italy, Greece and the U.K.

The ICE Dollar Index fell 0.1% to 97.460, erasing gains from earlier in the session. The reversal came as the pound started to move higher, buying $1.2867 compared with $1.2840 late Monday in New York.

The euro also pared losses to trade at $1.1162, little changed from $1.1164 on Monday.

Both the pound and euro had traded sharply lower earlier in Tuesday's session as Europe was hit with fresh concerns over Greece and Italy, as well as jitters ahead of the U.K.'s general election next week. Sterling moved sharply lower on Friday after the latest opinion polls showed the Conservative party's lead ( over Labour was narrowing markedly ahead of the June 8 vote.

In Italy, former prime minister and the leader of Italy's ruling centre-left Democratic party Matteo Renzi has suggested the country hold its general election in September, pulling the vote forward from 2018. That has sparked fears that a euroskeptic party will make a significant showing, putting Italy on a path to leave the eurozone.

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"This would bring forward a risk factor that had been previously put out to grass," said Richard Perry, analyst at Hantec Markets, in a note.

Meanwhile, in Greece, finance minister Euclid Tsakalotos on Monday hinted that the country may opt out of getting its next bailout payment unless its creditors agree on debt relief. That could put the country's next debt repayment in jeopardy and raise the risk of a default.

The renewed unease about Greece and Italy helped fuel a rally in the yen . The greenback bought Yen110.95, down from Yen111.26 on Monday.

(END) Dow Jones Newswires

May 30, 2017 06:53 ET (10:53 GMT)