The euro fell to its lowest in a month at $1.3550 level

Good Morning,

- The euro fell to its lowest in a month at $1.3550 level as Banking sector fears in Europe come on game and Germany’s ZEW Index falls for seventh month yesterday …

- Asian stocks were mixed on Wednesday in choppy trade following better-than-expected growth data from China. Japan's Nikkei -0.10%, Hong Kong's Hang Seng 0.22% (07:09 GMT), Korea's Kospi 0.04%, Australia's ASX 200 0.16% and China's Shanghai -0.15%.

- House prices in London more than double the rest of the UK for the first time. New data from the Office for National Statistics (ONS) shows that property prices in London shot up 20.1pc in the 12 months to May to £492,000, compared with a rise of 7.3pc across the rest of Britain. The average price of a house in London is now 2.2 times that of a regional home for the first time, according to the ONS.

- The euro sank to a two-year trough at 79.08 pence, while sterling made a six-year peak on the dollar at $1.7191.

- The New Zealand dollar fell sharply to $0.8692, after the country reported softer-than-expected inflation.

- FED’s Yellen reiterated that the U.S. labour market was far from healthy and signaled the Fed would keep monetary policy loose until hiring and wage data show the effects of the financial crisis are "completely gone".

- US Retail sales showed a broad-based gain in June, which probably helped the U.S. economy rebound in the second quarter. Purchases increased 0.2 percent after a 0.5 percent advance in May that was larger than previously reported, Commerce Department figures showed yesterday.

- Goldman Sachs on EUR/USD: GS argued that there were four major drivers of USD strength against the major currencies– interest rate differentials, shifts in the oil balance in the US, safe haven demand and reserve recycling. GS reiterates this view today projecting a bullish path for the USD over the coming months. "We still believe in those arguments even though it has been a frustrating time for dollar bulls. The USD on a TWI basis has been broadly flat against the G10. However, this TWI performance, flies in the face of interest rate differentials which are becoming more supportive of Dollar strength," GS argues. "Indeed, the 2-year rate differential of the US versus the trade-weighted G10 has risen to its most Dollar supportive level since 2009, as underscored also by our US economics team bringing forward their date for the first rate hike to Q3," GS adds. GS still holds this structural bullish USD view against the EUR."The Euro has weakened from 1.40 to 1.35 in expectation of and subsequent delivery of ECB easing at its June meeting. As a result, we have changed our 3-month EUR/USD forecast to 1.35 from 1.38. Our 6- and 12-month forecasts are unchanged at 1.34 and 1.30," GS projects.

- Bank of Japan Monthly Report: Japan's economy has continued to recover moderately as a trend, although the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed. Overseas economies - mainly advanced economies - have been recovering, albeit with a lackluster performance still seen in part.

- China’s economic growth accelerated for the first time in three quarters after the government sped up spending and freed up more money for loans to counter a property slump. Gross domestic product rose 7.5 percent in the April-June period from a year earlier, the statistics bureau said today in Beijing, compared with the 7.4 percent median estimate in a Bloomberg survey. June industrial production and first-half fixed-asset investment exceeded projections.

- Watch today: UK wage inflation , US industry, US Housing index.

Have a nice Day!