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The euro was poised for its first weekly gain in a month versus the dollar as traders increased bets the European Central Bank will tighten monetary policy and Greece progressed in staving off a default.
The euro headed for a weekly advance after Greek Prime Minister George Papandreou won approval to implement an austerity plan needed to keep aid flowing to his nation.
“An interest-rate hike next week is pretty much a done deal for the ECB,” said Khoon Goh at ANZ National Bank Ltd.. “The yield differential will continue to provide support for the euro.”
The dollar was set to rise for a second week versus the yen before a report forecast to show U.S. consumer confidence was stronger than previously reported. The Reuters/University of Michigan index of consumer sentiment was at 72 last month compared with a preliminary reading of 71.8, according to the median estimate of economists.
“I’m bullish on the dollar toward the year-end,” said Kengo Suzuki at Mizuho Securities Co.. “The U.S. economic slowdown is temporary.”
The New Zealand dollar weakened for the first time in four days versus the dollar after data showed Chinese manufacturing expanded in June by less than economists had estimated, sapping demand for higher-yielding assets.
The yen was headed for a weekly decline on prospects the Bank of Japan will lag behind its counterparts in raising interest rates.
The quarterly Tankan index of sentiment at large manufacturers fell to minus 9 in June from 6 in March, the BOJ said today. The median estimate of economists was for a reading of minus 7.
EUR/USD printed session highs on $1.4550 before retreated to $1.4508.
GBP/USD tested $1.6095, but failed to break above the figure and retreated to current $1.6070.
USD/JPY fell to session low at Y80.54 before recovered to Y80.80.
Today's focus will be on UK PMI report in Europe.
In US today's attention will be on final reading of Michigan sentiment index, ISM Mfg PMI and Construction spending.
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