Dollar slips against euro as Italy fears ease

The dollar eased against the euro on Wednesday as investors took fears related to the Italian political situation in stride, and after U.S. Federal Reserve Chairman Ben Bernanke said he backed the central bank’s asset-purchase program.

The ICE dollar index DXY -0.16% , which measures the greenback’s performance against six major global currencies, slipped to 81.788 by late afternoon in Tokyo from 81.948 in North America Wednesday.

The WSJ dollar index XX:BUXX -0.13%  , a gauge of the currency’s moves versus a slightly wider basket of rival units, slipped to 72.63 from 72.70.

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The euro EURUSD +0.19% EURJPY -0.09%  was fetching $1.3086, up from $1.3065, and 120.13 yen as compared with ¥120.05.

The dollar USDJPY -0.27% was little changed at ¥91.81 versus ¥91.88.

“European markets should see a more subdued start than yesterday, and while the Italian political issues haven’t materially impacted the psyche of U.S. and Asian equity traders, [they have] certainly influenced forex players,” said Chris Weston, chief market strategist at IG Markets.

Hints of stabilization appeared in the foreign-exchange markets as Italy’s political parties began exploring the possibility of stitching together a government after an inconclusive election result had resurrected worries of a euro-zone crisis. Such fears had weighed heavily on risk currencies such as the euro earlier this week.

Also, Fed Chairman Bernanke Tuesday said in remarks to the Senate Banking Committee that he backed continuation of the central bank’s bond purchases, worth $85 billion a month, easing worries about the impact from an end to that program.

Among other major currency pairs, the British pound GBPUSD -0.09% was fetching $1.5108 as compared with $1.5128.