Europe

The Euro fell to its lowest in a month versus the Greenback amid banking fears in the bloc and the ZEW Index fell for a seventh month yesterday. German ZEW economic sentiment slipped to 27.1 from 29.8 against a forecast of 28.0 while current conditions plummeted to 61.8 from 67.7. At the Euro-zone level, sentiment fell 48.1 in July from 58.4 the prior month. The 18-nation currency skidded 0.1% to $1.3550, after earlier reaching $1.3545, the least since June 18. Against its Japanese peer, it fell 0.2% to 137.7526 Yen.

The Pound dipped after unemployment figures. The Office of National Statistics showed that U.K’s jobless rate fell to 6.5% in May, in line with consensus. On the other hand, the paper also showed weaker wages, with total pay including bonuses rising an annual 0.3%, the weakest growth in 5 years and below a consensus forecast of 0.5%. Sterling slid 0.1% to $1.7125. Against the bloc’s currency, it climbed to a fresh 23-month high of 1.2655 Euro before fetching 1.2647 Euro, up 0.1% from yesterday’s close. It was down 0.06% to 174.1811 Yen.

North America

The U.S Dollar was slightly higher versus major rivals following comments by Fed Chair but failed to continue its advance in Asian hours without fresh cues. Yellen hinted that rates could climb earlier than expected if employment and inflation figures continue to improve. The Greenback was faintly higher at 101.6844 Yen after climbing as high as 101.7554 Yen, its strongest level since Jul.09. It added 0.1% to $1.3550 after touching a 4-week high of $1.3545. Investors are keeping an eye on the economic data out later in the day, namely the producer prices, the industrial output and the capacity utilization.

Around the world

The Yen strengthened versus the majority of its most traded counterparts after the BOJ monthly report showed that the output gap turned positive in January-March for the first time in about 6 years. BOJ Governor Haruhiko Kuroda stated that the improvement in demand will help drive the consumer price towards the central bank’s 2% target and that the economy is still on track for a moderate recovery. In addition, investor’s risk appetite was curbed after Fed officials warned about the high valuations in stock market. Japan’s currency inched up almost 0.2% to 137.7526 per Euro. Against the U.S currency, it was little moved at 101.6893 per Dollar.

Meanwhile, Australia’s Dollar fell after Fed Janet Yellen’s warning that the low US interest rates may have inflated asset prices to the point where the financial system may be vulnerable. The so-called Aussie declined despite upbeat set of Chinese GDP figures. It plummeted to its lowest in more than a week at $0.9333 before fetching $0.9353, still down 0.2% from late U.S hours. Against the common currency, it fell as low as 68.83 Euro cents before trading at 68.98 cents, down 0.1% from yesterday’s close. The Aussie slid 0.2% to 95.2809 Yen after dropping to a week trough of 94.9391 Yen earlier today.

The New Zealand Dollar tumbled after softer-than-expected CPI figures for the second quarter. Government data showed that the inflation rate registered at 1.6%, short of consensus forecasts of a 1.8% reading, undermining the RBNZ rate hike expectations. The Kiwi was also weighed down by the GDT Price Index, a measure of dairy prices, which dropped 8.9% to the lowest level since December 2012 in the latest GlobalDairyTrade auction. It plunged as much as 0.7% on average against its leading counterparts, last standing at $0.8399. It touched a 3-week trough of $0.8693, 0.8% below U.S hours. It was down 0.6% to 64.20 Euro cents after dropping to 64.11 cents, unseen since Jul.02. The Kiwi declined 0.8% to 88.4550 Yen, hovering near its 3-week low of 88.3670 Yen hit earlier today.

Interbank Rates

GBP/EUR    1.26461
GBP/USD    1.71259
GBP/JPY    174.178
EUR/USD    1.35425
EUR/JPY    137.733
USD/AUD    1.06991
USD/CAD    1.07628
USD/NZD    1.15011
USD/JPY    101.705