Dollar rebounds in tandem with U.S. yields, euro down on Italy's political turmoil

The greenback snapped its recent losing streak and rose against majority of its peers on Wednesday as a rally in U.S. Treasury yields together with political woes in Italy triggered safe-haven buying in usd.  
  
Versus the Japanese yen, dollar retreated from 138.37 in Asian morning to 137.91 ahead of European open. The pair then rebounded to 138.33 at European open and traded sideways as focus remained on other usd majors.  
  
The single currency traded sideways in Asia before briefly rising to a 2-week peak at 1.0273 in early European morning before falling to 1.0174 in European morning on broad-based selling in euro due to political woes in Italy. Although the pair then staged a short-covering rebound to 1.0237 in New York morning, euro fell again on broad-based usd buyig due to rally in U.S. yields and later hit session lwos of 1.0156.  
  
Reuters reported Mario Draghi said on Wednesday he was prepared to stay on as Italian prime minister if the parties in his broad coalition threw their weight back behind him. "Are the parties and you parliamentarians ready to rebuild this pact?" Draghi said in a speech to the upper house, adding that was what Italians were demanding. Draghi had tendered his resignation last week after the populist 5-Star Movement refused to back the coalition in a parliamentary confidence vote but President Sergio Mattarella rejected the resignation.  
  
The British pound traded with a firm bias in Asia and gained to 1.2037 before retreating sharply in tandem with euro to 1.1990 in early European morning. Despite rebounding briefly to 1.2031, cable fell to 1.1956 at New York open due to usd's broad-based rebound and later edged lower to session lows of 1.1954.  
  
Data to be released on Thursday:  
  
New Zealand imports, exports, trade balance, Japan exports, imports, trade balance, BOJ interest rate decision, Australia NAB business confidence, U.K. PSNB, PSNCR, France business climate, EU ECB refinancing rate, ECB deposit rate, U.S. initial jobless claims, continuing jobless claims, Philly Fed manufacturing index, Canada new housing price index and U.S. leading index.