Europe

The Euro pared earlier gains as investors turned to safer assets. The 18-nation currency hit an intraday peak of $1.3547 before standing at $1.3524, almost unchanged from Friday’s close. Against its Japanese peer, it skidded 0.1% 136.9579 Yen after dropping to 136.7454 last week, the lowest level since mid-November 2013.  Market players are focusing on Europe’s main event, namely the PMI figures on Thursday. The composite PMI across the Euro-zone is expected to have nudged up to 53 from 52.8 in May.

Sterling weakened versus the majority if its most traded counterpart ahead of the 2 key events on the British economic calendar this week. Wednesday’s release of the minutes report from the BoE latest policy meeting and Friday’s second quarter UK GDP report are likely to influence demand for the Pound. It slid 0.1% to $1.7073. Against the common currency, it was also down 0.1% to $1.2675 Euro after reaching 1.2675 Euro on July 17, a level unseen since August 20, 2012. The Pound fell 0.1% to 173.0250 Yen.

North America

The U.S Dollar remained close to its 5-1/2 month high versus the single currency before data tomorrow economists forecast will show consumer-price inflation held at the fastest since October 2012, boosting the case for higher interest rates. The US Bureau of Labour Statistics is expected to show that consumer prices climbed at an annual rate of 2.1% in June matching May’s figure. The Greenback was little changed at $1.3524 per Euro but lingered near its 5-1/2 month high of $1.3495 hit on Friday. Against its Japanese peer, it was down 0.1% to 101.2714 Yen, 0.1% above its lowest level in 5-1/2 months of 101.1213 Yen hit last week.

Around the world

Japan’s currency strengthened amid concerns that the geopolitical tensions could flare up at any time fuelling demand for the safe-haven Yen while Japanese financial markets were closed on Monday for a public holiday. It inched up 0.1% to 136.9579 per Euro, within range of its recent peak of 136.7454 hit last week. Against its U.S counterpart, it traded at 101.2714 per Dollar, down 0.1% from late U.S hours and hovering near its 5-1/2 month high of 101.1213 Yen hit on Jul.17.

Australia’s Dollar steadied as markets recovered from last week’s risk aversion associated with the downing of Malaysian Airlines flight MH17 and Israel’s’ invasion of Gaza. The so-called Aussie was little moved at $0.9391. Investors are now focusing on tomorrow’s RBA Governor Glenn Stevens’ speech followed by Wednesday’s CPI figures. It tumbled 1.0% on July 3 when Stevens said that the currency was overvalued. The report from the local Bureau of Statistics could have more of an impact, as a strong inflation print could boost the currency. It also traded little changed at 69.44 Euro cents. Against Japan’s currency it dropped 0.1% to 95.1150 Yen. 

Meanwhile New Zealand’s Dollar strengthened after the $700 million sale of Griffin’s Foods to a Philippines-based company stoked demand for the Kiwi and on speculation that the Reserve bank as traders pondered the likely language the Reserve Bank will raise interest rate this week. The currency rose as high as $0.8717 and last stood at $0.8702, still up 0.16%. It added 0.1% to 64.32 Euro cents. Against its Japanese peer, it appreciated as much as 0.25% before fetching 88.0701 Yen, almost unmoved from Friday’s close.

Interbank Rates

GBP/EUR    1.26272
GBP/USD    1.70742
GBP/JPY    173.021
EUR/USD    1.35218
EUR/JPY    137.022
USD/AUD    1.06635
USD/CAD    1.07513
USD/NZD    1.15027
USD/JPY    101.334