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The dollar remained lower after a two-day slide versus the yen as the U.S. government moves closer to a shutdown with lawmakers wrangling over the debt limit. The U.S. Senate yesterday began considering a measure the House passed Sept. 20 that cuts off money for President Barack Obama’s health-care law and finances the federal government through mid-December. Democratic leaders in the Senate said they won’t pass a bill that takes money away from the 2010 legislation. With government funding set to expire Oct. 1 and the Treasury expected to exhaust its ability to borrow funds in mid-October, U.S. federal offices have begun planning for the possibility of a shutdown.
The currencies of Australia and New Zealand dropped against most major peers as Asian stocks retreated from a four-month high.
Federal Reserve Bank of Kansas City President Esther George will speak today, after New York Fed President William C. Dudley said yesterday the U.S. economy still needs support. Cleveland Fed President Sandra Pianalto will also speak today in Chicago.
Reports today may show gains in U.S. home prices, adding to evidence the economy may be strong enough to weather a reduction in stimulus. The S&P/Case-Shiller index of home prices in 20 cities probably rose 12.4 percent in July from a year earlier, according to the median estimate of analysts polled by Bloomberg before today’s data. If confirmed, that would be the biggest gain since February 2006.
The euro remained lower after its biggest one-day drop in two weeks ahead of a speech in Vienna by European Central Bank Governing Council member Ewald Nowotny. The ECB’s Nowotny will speak today after President Mario Draghi said yesterday he’s ready to deploy another long-term refinancing operation to provide funds to Europe’s banking system if needed.
EUR / USD: during the Asian session the pair traded in the range of $ 1.3485-95
GBP / USD: during the Asian session, the pair fell to $ 1.6025
USD / JPY: during the Asian session the pair traded in the range of Y98.65-90
Tuesday is another full day of calendar releases Tuesday, with data and central bank appearances on both sides of the Atlantic. The European calendar gets underway at 0645GMT, with the release of French August housing starts and permits at 0645GMT. The German September IFO business climate index is set for release at 0800GMT, following in the week of the better-than-expected euro area services PMI. Also at 0800GMT, ECB Governing Council member Ewald Nowotny speaks in Vienna. There are further ECB speakers expected from 1100GMT, when Vice-President Vitor Constancio is slated to speak on the occasion of the Awarding Ceremony of the German Bernacer Prize. At 1130GMT, ECB Executive Board member Benoit Coeure and ECB Governing Council member Erkki Liikanen speak in Helsinki. At 1300GMT, the Belgian August BNB business sentiment is expected. The last ECB appearance of the day, at 1630GMT, sees Executive Board member Yves Mersch and ECB Governing Council member Ewald Nowotny speak in Vienna. The limited UK calendar sees the release of the August BBA lending data. The opposition Labour Party continues with its annual conference, as Leader Ed Miliband is set to speak.
Tuesday is another full day of calendar releases Tuesday, with data and central bank appearances on both sides of the Atlantic. The US calendar gets underway at 1145GMT, when the ICSC-Goldman Store Sales data for the Sept 21 week are set to be published. At 1230GMT, the Canadian July retail sales numbers are set for release. Back in the US, at 1255GMT, the Sept 21 week Redbook Average will cross the wires. There is further US data at 1300GMT, when the July S&P/Case-Shiller Index and the July FHFA Home Price Index will be released. Fed speakers get underway from 1330GMT, when Cleveland Federal Reserve Bank President Sandra Pianalto delivers a speech to open the Chicago Fed payments conference in Chicago. Further US data will cross the wires at 1400GMT, when the Sept Richmond Fed Manufacturing Index and the Sept Consumer Confidence numbers are expected. The Conference Board's index of consumer confidence is expected to fall to a reading of 79.5 in September after a modest rise in the previous month. At the same time, Kansas City Federal Reserve Bank President Esther George introduces speaker at Chicago Fed payments conference in Chicago.
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