By Shinichi Saoshiro
TOKYO (Reuters) - The dollar stood tall against a basket of currencies on Thursday, as the euro retreated to a five-month low on concerns the political developments in Italy could cause wider disruptions in the common currency bloc.
The euro was 0.05 percent higher at $1.1813
Political uncertainty in Italy, where populist parties have jostled to forge a common platform in a bid to lead the next government, have been a major drag on the euro.
The common currency slid to the five-month low on reports that Italy's anti-establishment 5-Star Movement and anti-immigrant League may ask the European Central Bank to forgive 250 billion euros of debt as the parties worked to draft a coalition programme.
"The euro looks on track for further losses as market participants still appear to have more long positions on the euro to liquidate," said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.
"While the situation in Italy is a concern for currencies, the 5-Star Movement sees Britain struggle with its EU exit plan and is unlikely to pursue a similar agenda. The political fallout from Italy could be relatively well contained as a result."
For now the euro also faced pressure from a bullish dollar, which has been boosted this week as U.S. benchmark yields broke above the 3 percent threshold to a seven-year high.
The dollar index against a basket of six major currencies was a shade lower at 93.298 <.DXY> after rising on Wednesday to 93.632, its highest since Dec. 19.
The dollar was steady at 110.380 yen
The Australian dollar was little changed at $0.7514
Other commodity-linked currencies like the Canadian dollar also advanced as equities bounced back overnight from the previous day's losses caused by the spike in U.S. yields.
The loonie stood firm at C$1.2785 per dollar
The New Zealand dollar traded at $0.6899
(Editing by Sam Holmes)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: May 17, 2018 07:05 AM