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The dollar headed for a weekly gain against most of its major peers as shares fell before data today forecast to show German business confidence declined this month, boosting demand for safer assets. The Ifo institute’s business climate index, based on a survey of 7,000 executives, will drop to 105.6 from 106.9 in May, according to the median economist estimate compiled by Bloomberg News. That would be the lowest reading since March 2010. Ifo releases the report at 10 a.m. in Munich today. Data yesterday showed euro-area manufacturing shrank at the fastest pace in three years, and a Chinese output gauge indicated contraction. More Americans than forecast filed claims for jobless benefits, manufacturing in the Philadelphia region shrank and sales of existing homes fell, separate reports indicated.
The greenback maintained its biggest advance in six months versus the euro as Asian stocks extended a worldwide slump following reports that signaled Europe’s debt crisis is weighing on economic growth.
Demand for the 17-nation euro was limited after Moody’s Investors Service lowered credit ratings on 15 global banks. Among bank downgrades by Moody’s yesterday, Credit Suisse Group AG’s credit rating was reduced by three levels and Morgan Stanley’s by two steps. The rating changes reflect the lenders’ “significant exposure to the volatility and risk of outsized losses inherent to capital-markets activities,” Moody’s Global Banking Managing Director Greg Bauer said in a statement.
German Chancellor Angela Merkel, French President Francois Hollande, Italian Prime Minister Mario Monti and Spanish Premier Mariano Rajoy are set to gather in Rome today. The meeting is to help prepare for a June 28-29 European Union summit in Brussels at which leaders will discuss the path to further financial integration, including proposals for closer banking cooperation.
EUR/USD: during the Asian session the pair holds in range $1.2540-$1.2565
GBP/USD: during the Asian session the pair restored after yesterday's fall.
USD/JPY: during the Asian session the pair continued yesterday's gain.
The Ecofin meeting takes place in Luxembourg today and the main European data release will be the 0800GMT release of the German IFO business survey where the main index is expected to decline to a reading of 105.5 from 106.9 last month. Later on, at 1710GMT, German Chancellor Angela Merkel, Italian PM Mario Monti, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy give a joint press conference after their meeting, in Rome. US data comes later in the session with the 1900GMT release of Treasury Allotments By Class data and the 2015GMT release of C&I Loans
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