Euro surges in Asia

The euro held firm on Wednesday as investors started to focus on the European Central Bank's policy meeting next week, while concerns that the United States could pull out of a trade pact with Canada and Mexico hit the peso and the Canadian dollar.
The euro traded at $1.1724, having gained about 0.5 percent so far this week and hovering about two cents above its 10-month low of $1.1510 set on May 29.
Market players said the euro got a boost on Tuesday after Bloomberg, citing sources, reported that the ECB could conclude its next policy meeting this month with a public announcement on when its quantitative easing program would end.
Many traders have thought the ECB would seek to avoid causing a ripple at its next policy meeting on June 14 given the uncertainty caused by the Italian political situation.
The report followed a speech by Italy's new Prime Minister Giuseppe Conte, whose promise of radical change had mixed blessings for the euro.
While his reassurance that leaving the euro was not on his agenda helped to underpin the common currency, the new government's tax cuts and higher welfare spending plan lifted Italian bond yields, undermining investor confidence.
"The market will start to focus on the ECB from now on. Politics in Italy and Spain will play second fiddle as we now have new governments in both countries," said Kazushige Kaida, head of foreign exchange at State Street Bank.
The euro hit a two-week high of 128.95 yen in early Asian trade on Wednesday.
The dollar traded at 109.85 yen, having risen to 110.01 yen the previous day. It has extended a recovery from a five-week low of 108.115 yen on May 29 on easing concerns about political instability in Europe.
The British pound was firm at $1.3401, having gained 0.62 percent on Tuesday on strong UK service sector survey, also extending its recovery from a six-month low of $1.3205 set on May 29.
The Australian dollar rose after the country's GDP data beat market expectations.
The Aussie stood at $0.7660, up 0.6 percent on the day, and near six-week high of $0.7665 touched on Monday.
The Canadian dollar and the Mexican peso came under renewed pressure after White House economic adviser Larry Kudlow said on Tuesday that President Donald Trump is considering holding separate talks with Canada and Mexico.
That added fuel to speculation the United States could scrap the North American Free Trade Agreement (NAFTA).
The Canadian dollar had fallen to a 2-1/2-month low of C$1.3068 per US dollar on Tuesday, though it edged up in Asia on Wednesday after a media report that Treasury Secretary Steven Mnuchin is said to have urged Trump to exempt Canada from tariffs. The Mexican peso hit a 15-month low of 20.4705 peso to the dollar on Tuesday and last stood at 20.4075.