Forexpros - The U.S. dollar was lower against the euro on Monday after regional election results in Spain appeared to indicate support for government austerity policies, but gained ground against the yen amid expectations for more easing by the Bank of Japan. During European morning trade, the dollar was down against the euro, with EUR/USD rising 0.28% to 1.3058. The euro steadied after the center-right Popular Party of Prime Minister Mariano Rajoy increased its majority in his home region of Galicia on Sunday, removing a possible obstacle to formally requesting a bailout from Spain’s euro zone partners. The greenback rose to a more than three-month high against the yen, with USD/JPY up 0.63% to 79.81. The yen remained under heavy selling pressure after weaker-than-forecast Japanese trade data earlier Monday fuelled expectations for more monetary easing by the BoJ later this month. Japan posted a JPY558.6 billion trade deficit in September, as exports fell 10.3% from the same month last year, the biggest drop since May 2011, two months after Japan’s earthquake disaster. Elsewhere, the greenback was lower against the pound and the Swiss franc, with GBP/USD up 0.25% to 1.6044 and USD/CHF losing 0.18% to trade at 0.9268. The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.02% to 0.9933, AUD/USD inching down 0.09% to 1.0323 and NZD/USD rising 0.28% to 0.8181. Sentiment on the Australian dollar was hit after the country’s government said earlier that it will cut spending to help produce a budget surplus this fiscal year, fuelling speculation over a possible rate cut by the Reserve Bank of Australia next month. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.13% to 79.62. Trade was expected to remain subdued on Monday, with no major economic data scheduled for release.

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