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A gauge of the U.S. dollar was 0.2 percent from a four-week high before data tomorrow economists say will show consumer-price inflation held at the fastest since October 2012, boosting the case for higher interest rates. U.S. consumer prices climbed at an annual rate of 2.1 percent in June, matching May's figure that was the most since October 2012, according to a Bloomberg News survey of economists before the Labor Department report. The inflation rate has increased from 1.1 percent in February.
The U.S. currency has risen versus all except one of its Group-of-10 peers this month as traders boosted bets the Federal Reserve will increase its benchmark from near zero by the middle of 2015.
The New Zealand dollar rose for a second day on speculation the central bank will raise borrowing costs this week. Central bank Governor Graeme Wheeler will raise the cash rate for a fourth time this year, to 3.5 percent, according to all except one of 15 economists surveyed by Bloomberg. Officials will raise rates by 67 basis points during the next 12 months, according to a Credit Suisse Group AG index. That compares with a projected increase of as much as 135 basis points in March.
EUR/USD: during the Asian session, the pair is trading around the level of $1.3530
GBP/USD: during the Asian session, the pair traded in the range of $1.7080-90
USD/JPY: on Asian session the pair fell to Y101.25
With EU finance ministers meeting tomorrow in Brussels to discuss more stringent sanctions against Russia, one mitigating factor is the foreign debt that Russia has accumulated, with the latest numbers totalling around USD $730bn, with a majority borrowed from European banks. The European banking sector's troubles were further highlighted in recent weeks by Portugal's Espirito Santo and its bad debt issues.
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