Euro falls on EU summit pessimism
The single currency fell for a third consecutive day on continued pessimism that the 2-day EU summit beginning on Thursday will fail to deliver new measures to ease the region's ongoing debt crisis.
Although the single currency rose briefly to session high at 1.2508 in Asian morning, euro slipped in European session and then dropped to an intra-day low at 1.2445 in New York morning on continued pessimism over the EU summit commencing on Thursday. However, failure to pierce through Tuesday's 2-week low at 1.2442 prompted minor short covering and price recovered to 1.2477 at New York midday, partly due to the rise in U.S. equities before trading narrowly into New York closing.
Although the British pound rose to session high at 1.5641 in Asian morning, price dropped to 1.5609 after a report showed U.K. mortgage approvals fell to their lowest level in more than a year, supporting the case for the central bank to resume stimulus measures. Cable briefly recovered to 1.5634 before tanking to an intra-day low at 1.5546 on news of Barclays Plc. being fined 290 million pounds ($451 million), the largest penalty ever imposed by regulators in the U.S. and U.K., after admitting it submitted false interbank offered rates. Later, cable managed to hold above Monday's 1.5539 low and staged a minor recovery to 1.5575 in New York afternoon in tandem with euro before stabilising.
UK BBA Mortgage Approvals in May dropped to 30.238K from 32.103K previously.
Versus the Japanese yen, the greenback dropped to an intra-day low at 79.36 at Asian open before rising to 79.67 in European morning. Despite a brief pullback to 79.48, the pair strengthened to session high at 79.87 in New York morning before stabilising around 79.75.
In other news, Eurogroup says 'Spanish government to remain fully liable for any funds distributed to it fm eurozone rescue facilities; Spain expected to receive assistance fm the EFSF bailout fund until permanent ESM fund is active; Cyprus to receive aid fm either the eurozone's EFSF rescue fund or the permanent ESM facility; Cyprus must carry out fiscal adjustment, structural reforms in exchange for any aid package.'
On the data front, U.S. durable goods rose by 1.1%, more than forecast of 0.4% while Midwest manufacturing dropped to 93.4 from 94.4 previously.
Data to be released on Thursday:
Japan retail sales, German unemployment rate, U.K. GDP, Eurozone business climate and consumer confidence, U.S. GDP, PCE core and jobless claims.