Euro mixed in Asia as markets eye new Italy government

TOKYO: The euro was mixed in Asian trading on Tuesday morning after the weekend formation of a coalition government in Italy ended a political stalemate which had dragged on for months.

In Tokyo the single currency was slightly weaker on the dollar at $1.3087 from $1.3097 in New York trading on Monday, while it was higher at 128.23 yen against 128.01 yen in US trade.

There are rising expectations that the European Central Bank will cut rates this week to counter the recession in the 17-nation eurozone, which may weigh on the euro's value. Easing tends to weaken a national currency.

Italy's new Prime Minister Enrico Letta said Monday his coalition government would act fast to reverse an austerity policy that he said was hurting Italy and called on Europe to become a motor for growth.

"Italy is dying from austerity alone. Growth policies cannot wait," Letta said during his inaugural speech to parliament.

The recession-hit country, effectively rudderless since an inconclusive election in February, is under pressure to act fast to tackle social, economic and institutional ills.