EUR/USD was down 0.41% to 1.1530 by 04:26 AM ET (08:26 AM GMT), the lowest level since Sept. 10.
The drop in the euro came after Claudio Borghi, head of the lower house’s budget committee, said Italy would have solved its fiscal problems with its own currency.
The comments added to a war or words with the European Union over the populist government’s budget proposal which seeks to increase spending and cut taxes, but would raise Italy’s debt and breach EU budget rules.
The yen gained the boost to market sentiment from a new rework of the North American Free Trade Agreement faded. Analysts fear the Trump administration will now take a harder line in its trade policy against China, using trade deals with Canada, Mexico and South Korea as leverage.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.28% to 95.19, the highest level since Sept. 12.
The pound was lower, with GBP/USD down 0.43% to 1.2985 as investors remained pessimistic about prospects for Brexit negotiations between the UK and the European Union.
Elsewhere, the Australian dollar was down, with AUD/USD shedding 0.54% to trade at 0.7186 after the country’s central bank left interest rates on hold at record lows overnight, in what was a widely expected decision./investing.com