Euro Gains on Announcement Berlusconi to Quit After Austerity Plan Passes

The euro advanced against the dollar after Italian President Giorgio Napolitano said Prime Minister Silvio Berlusconi agreed to resign after the parliament approves the country’s austerity plans.

The 17-nation currency earlier traded little changed after Berlusconi won a vote in parliament without an absolute majority, fueling calls for him to quit and concern about who will lead the nation out of its debt crisis. The yen appreciated to its strongest level against the dollar since Japan intervened Oct. 31 to stem its rise.

“From the market’s perspective, they would like to see a technocrat government because that is what most likely to please the troika and manage Italy through the next through few months,” said Greg Anderson, a senior currency strategist at Citigroup Inc. in New York. The troika comprises the European Union, European Central Bank and International Monetary Fund.

The euro gained 0.4 percent to $1.3835 at 2:32 p.m. New York time, after falling earlier to as low as $1.3725. It was little changed at 107.47 yen after paring losses of as much as 0.4 percent. The Japanese currency rose 0.5 percent to 77.68 per dollar and touched 77.60.

The yen reached a post-World War II high of 75.35 to the greenback on Oct. 31, threatening exporters, and the Bank of Japan sold the currency to weaken it.

The South African rand climbed as gold futures topped $1,800 an ounce for the first time in seven weeks. The franc rose versus the euro as Swiss National Bank Vice President Thomas Jordan said the SNB is not weakening it to gain export advantage.