Investing.com - The euro gained ground against the dollar on Monday, after Italy’s president moved to block the appointment of a euro sceptic economy minister, bolstering investor sentiment towards the single currency.

EUR/USD was up 0.38% at 1.1694 by 04:11 AM ET (08:11 AM GMT), rebounding from Friday’s six-month trough of 1.1644.

The euro was boosted after Italy’s populist parties abandoned their bid to form a coalition government after the country’s President Sergio Mattarella blocked the nomination of a euro sceptic finance minister.

Investors had feared that the coalition could endanger Italy’s membership in the euro zone, but political uncertainty remained elevated amid the prospect of fresh elections.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.24% at 93.98, pressured lower by the stronger euro.

The euro was also higher against the yen, with EUR/JPY advancing 0.46% to 128.00, pulling away from the eleven-month low of 127.72 reached on Friday.

The dollar was fractionally higher against the yen, with USD/JPY at 109.46 after edging up to an overnight high of 109.84.

Demand for the dollar was underpinned after U.S. President Donald Trump said on Sunday that a U.S. team had entered North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un, despite question marks hanging over the talks.

The pound pushed higher, with GBP/USD rising 0.19% to 1.3321.

The Australian and New Zealand dollars were also higher, with AUD/USD adding on 0.19% to trade at 0.7561 and NZD/USD rising 0.46% to 0.6946.

Trade volumes looked likely to remain light on Monday, with markets in the U.S. and the UK closed for holidays.