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The euro continued its yesterday's decline against the dollar on negative sentiment in the market, as well as a sharp decline in stock markets at the opening of trading. At the same time, the Spanish Prime Minister Mariano Rajoy said that Spain will wait a formal request for financial assistance, and the International Monetary Fund said that the European Central Bank should take steps to mitigate the policy. Investors are also slow to cover short dollar positions that are open in the expectation that Bernanke will announce the beginning of the third phase of quantitative easing in Jackson Hole on Friday, as the outcome of this speech is unclear. The single currency rose slightly today amid lower borrowing costs in Italy. Italy sold a ten-year treasury bills in the amount of 4.0 billion euros, 3.0-4.0 billion euro target. The ratio of applications to cover was 1.42 versus 1.29 previously.
On stronger dollar also weighed data on consumer spending, which rose in July for the first time in three months, gaining 0.4%. A separate Labor Department report showed that the number of initial claims for unemployment benefits in the U.S. has changed, from a revised upward index last week.
During the first half of the day's pound rose against most currencies after data showed that the number of approved applications for mortgage loans increased in July, thus indicating a recovery from the recession in June. Data from the Bank of England showed that the number of mortgage approvals rose to the level of 47,312 in July. But even these positive data have not helped the pound to hold their positions, and as a result the currency plummeted, updating the yesterday's low. This trend was caused by the Prime Minister of Spain, Mariano Raho.
His speech also contributed to the decline in value the Australian dollar, which lost its position against most major currencies. But the decline began after a government report that the number of approved applications for housing construction fell in July to -17.3%, reaching the minimum values at the same time in the last ten years in the background of the fact that most of the investment now accounts for the mining industry, which is now at its peak. We also learned that the profitability of Australian 10-year bonds continued to decline, fixing the fall for 10 consecutive days, and is on the verge of the long fall, at least since 1990.
Canadian dollar continues to decline relative to the 16 major currencies after yesterday's data showed that the U.S. economy, which is the largest trading partner, increased by more than the initial estimate. Was supported by the fall in output today's U.S. data, which proved positive.
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