Investors like Mario Monti. It's that simple.
And it's also too bad. After Monti, Italy's austerity-minded prime minister, announced Monday that he will resign in 2013, Italian bonds went into a tailspin and currency investors started fretting about the potential return of Silvio Berlusconi, the former prime minister.
"It seems like things stabilize in euro zone and then a new headline comes and introduces uncertainty again," says Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank. Unsettling news from Italy has particular impact, she adds, because "Italy is one of the countries that's been targeted by investors as perhaps needing a bailout in the future."