By William L. Watts & Lisa Twaronite, MarketWatch LONDON (MarketWatch) -- The U.S. dollar traded near a nine-month high versus the European single currency and advanced versus other rivals Thursday amid rising concerns over Italy's debt picture and the International Monetary Fund's recently announced plan to sell more than 190 tons of gold. The euro traded at $1.3570 versus the dollar, down from $1.3633 in North American trade late Wednesday. The single currency, which has dropped by about 10% versus the dollar from its November high, fell to its lowest level in almost nine months last week, to around $1.3530. Italy's Audit Court late Wednesday warned that derivative contracts used by Italian municipalities could magnify debt and imbalances over time, Dow Jones Newswires reported. Read about Italian debt concerns. That contributed to market concerns about Italy's public debt picture, analysts said, putting renewed pressure on the euro just as worries about a potential Greek default began to fade after the European Union gave Athens until March 16 to show that it was on track to meet aggressive deficit-cutting targets. "It really looks like speculators are trying to pick off the weakest country," said Peter Rosenstreich, chief market analyst at ACM in Geneva. "It seems like almost on a daily basis we're seeing new evidence from different countries coming to light," he said. "They definitely took a shot at Spain earlier on. Now they're taking a shot at Italy because the story of Greece has been postponed till mid-March." Debt concerns are likely to keep the euro under pressure, potentially setting up a fall toward $1.34 in the near term, he said. Strategists said the IMF's planned gold sales also helped boost the U.S. unit. The fund on Wednesday said it plans to sell 191.3 metric tons of the yellow metal on the open market as part of a program to sell a total of 403.3 tons approved by the IMF's executive board last September. Read about the IMF's planned gold sales. Gold futures fell sharply. In currency markets, the news weighed mostly on the euro and the commodities-sensitive Australian dollar, analysts said. The Aussie was buying 89.75 U.S. cents, down 0.1%, "All the bears gathered together in the past 12 hours, but not for a picnic," said Sue Trinh, senior currency strategist at the Royal Bank of Canada in Hong Kong, in a note to clients Thursday. The dollar index (DXY 80.54, +0.16, +0.20%) , which tracks the greenback against a trade-weighted basket of six major currencies, rose to 80.608 from 80.40 late Wednesday. The British pound was down 0.5% versus the U.S. dollar at $1.5596, while the euro gained 0.3% versus sterling to change hands at 87.01 pence. The pound came under pressure after the Office for National Statistics showed the U.K. public sector was a net borrower in January, defying expectations for a net repayment in a month that usually sees a cash bonanza for the British government. Read about the U.K.'s January borrowing figures. The dollar fell 0.4% versus the Japanese yen to change hands at 90.79 yen. The Bank of Japan kept its key interest rate on hold at 0.1% Thursday by unanimous vote as widely expected, maintained its overall economic view and didn't issue any new policy initiatives Thursday. It repeated its pledge to do all it could to pull Japan out of deflation. See full story on Bank of Japan meeting.

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