Europe

The Euro fell for a third day versus its Japanese peer before the release of the bloc’s inflation data. Economists forecast that Euro-area consumer prices rose 0.5% in June from a year earlier, matching March readings which was the least since 2009. It lingered near it 5-1/2 month trough of 137.2354 Yen and last fetched 137.3771 Yen, 0.1% below late U.S hours. The currency has on this downtrend since a weak reading of Germany’s ZEW index of economic indicator on Tuesday, the seventh straight monthly decline, and the concerns about the health of the euro-zone financial system which has now shifted to the background. If the CPI figures come out below expectations, the shared currency may decline below the 137.00 Yen level. Against its U.S peer, it was up almost 0.1% to $1.3534 but remained within range of its lowest level since Feb.04 of $1.3521 hit on Wednesday.

Sterling tumbled on concerns that the weak wage growth may deter the BoE from hiking interest rates. Yesterday, the Office of National Statistics reported that wages grew at just 0.7% in May compared to inflation that rose 1.5% for the same month. It is now apparent that real wages weakened by 0.8% and with last month’s inflation reading at 1.9%, so it will take a wage growth score of 1.1% in June just to maintain negative real wage growth of 0.8%. The Pound skidded 0.1% to $1.7119 and was down 0.3% versus its Japanese counterpart. It last stood at 173.7741 Yen. Against the 18-nation currency, the Pound declined 0.2% to 1.2648 Euro after earlier touching a 2-year peak of 1.2675 Euro.

North America

The U.S Dollar retreated in Asia after rallying in the previous session following upbeat economic report and Fed Chair Janet Yellen’s hawkish comments. The Greenback climbed to a week high at 101.7882 Yen on Wednesday in response to Yellen’s statement regarding a possible rate hike sooner than expected if inflation and job data continue to improve. Speaking to the House Committee on Financial Services on Wednesday, Yellen gave an optimistic assessment of the world’s largest economy. This was reinforced by the Fed’s regional Beige Book which reported that the US economy continued to pick up steam, with all regions showing growth, marking the second report in a row to do so. The Greenback last stood at 101.4944 Yen, down 0.2% from yesterday’s close. Against the single currency, it slid almost 0.1% to $1.3534 after touching a 5-1/2 month high of $1.3521 yesterday. Today’s economic agenda is mostly U.S, with the building permits, jobless claims and a string of speeches by Fed’s officials.

Around the world

The Yen strengthened versus all of its major counterparts after the U.S. and European Union imposed extra sanctions on Russia spurring demand for safer assets. Japan’s currency added 0.2% to 101.4944 per Dollar after tumbling to a week trough of 101.7882 per Dollar. Against the 18-nation currency, it soared to a 5-1/2 month high amid growing concerns on the threat of deflation ahead of inflation data later in the day. It last stood at 137.3701 per Euro, up 0.1% from late U.S hours.

Elsewhere, Australia’s Dollar recovered yesterday’s losses following Chinese data. The so-called Aussie plummeted to a 1-month trough despite better than expected Chinese growth and industrial production figures. It was little moved at $0.9371. It traded little changed at 69.23 Euro cents, after earlier reaching 69.34 cents, the highest since Jul.01. It fell 0.1% to 95.1041 Yen.

New Zealand’s Dollar dropped to its weakest level in 3 weeks as traders pared bets on higher interest rates. The Kiwi fell 0.2% to $0.8694 after hitting $0.8684, the least since Jun.25. Against the common currency, it hovered near a 2-week low of 64.11 Euro cents hit on Wednesday. It last stood at 64.20 cents, down almost 0.4% from late U.S trades. The Kiwi plunged 0.5% to 88.1684 Yen, a level unseen since Jun.11.

Interbank Rates

GBP/EUR    1.26482
GBP/USD    1.71192
GBP/JPY    173.739
EUR/USD    1.35349
EUR/JPY    137.363
USD/AUD    1.06721
USD/CAD    1.07395
USD/NZD    1.15022
USD/JPY    101.488