Forex: Thursday's review
The dollar rose against most of its 16 major counterparts after Federal Reserve Chairman Ben S. Bernanke signaled yesterday that the central bank won’t add to stimulus measures that could erode the value of the currency.
The Fed’s $600 billion program of U.S. debt purchases, its second round of quantitative easing, ends this month.
The euro fell versus the greenback as European Central Bank President Jean-Claude Trichet said the debt crisis threatens to infect banks. Currencies of oil-exporting countries, such as Canada’s dollar, tumbled after the International Energy Agency said it will release oil from emergency stockpiles.
The Swiss franc rose against all of its major peers, reaching a record against the euro, amid concern the global economy will falter.
A report showed European services and manufacturing growth slowed in June more than economists forecast, adding to signs the economy is losing momentum. A composite index based on a survey of euro-area purchasing managers fell to 53.6 from 55.8 in May, London-based Markit Economics said.
Applications for jobless benefits in the U.S. rose 9,000 in the week ended June 18 to 429,000, the Labor Department said today. Purchases of new houses fell in May for the first time in three months, dropping 2.1 percent to a 319,000 annual pace, Commerce Department data showed today in Washington.
The euro dropped amid concern Greek Prime Minister George Papandreou will face difficulty in getting parliamentary approval for budget cuts and asset sales needed to qualify for more aid.
European leaders meet today in Brussels for a two-day summit on Greece. German Chancellor Angela Merkel told reporters they’ll reaffirm a time-line for assistance to Greece hammered out by euro-area finance ministers. The finance chiefs will decide on July 3 whether Greece has met conditions for its next aid payment.
EUR/USD: the pair shown low in $1.4130 area. Later the rate restored and finished session in $1.4260 area
GBP/USD: the pair shown low in $1.5930 area. Later the rate restored and finished session in $1.6000 area
USD/JPY: the pair holds on Y80.30-Y80-80.
Likely another day of Greece related headlines, as the EU leaders summit continues. At 0800GMT the main release if the German June IfO report. The US calendar starts at 1200GMT, with the release of the May 2011 building permits revision is released. The main data release is due at 1230GMT, with the release of May 2011 Durable Goods Orders and the first quarter GDP revision. The pace of GDP growth is expected to be revised up slightly to +2.0% for the third estimate of the first quarter. The chain price index is expected to be unrevised at +1.9%. The ISM manufacturing index is released at 1400GMT and is expected to fall to a reading of
53.0 in June after falling in May, according to advance forecasts.