EUR/JPY holds stable around Y111.36, a bit lower session highs on Y111.47. Small bids between Y110.70/60 and Y110.20.
The dollar declines versus a basket of currencies as in the U.S. Congress Republicans and Democrats are still locked in a stalemate on raising the debt ceiling.
Even believing there will be a last-minute deal on the debt ceiling, the head of China's Dagong rating agency still plans to cut its U.S. rating soon. He said that the only question will be the size of the move.
Another factor for falling is statement by Richmond Fed Lacker about US economy.
The euro rising against the dollar after a huge drop, which was triggered as yesterday rating agency S&P downgraded the credit rating of Greece to 'CC' from 'CCC' with negative outlook. The downgrade of Greece by 2 notches takes it to the same level as Moody's Ca rating (developing outlook).
The kiwi slightly dropped against the dollar. The currency rose toward a record high after the central bank said it will likely remove the half-percentage-point “insurance” cut in the target lending rate made after a February earthquake. But the rise was curbed as Reserve Bank Governor Alan Bollard signaled that strength of New Zealand’ dollar may reduce the extent of rate increases.
Japan yen also went up as US President and the senators still haven’t reached an agreement on raising the US national debt..
A surprise drop in jobless claims suported the markets (398K vs. est. 425K and prev. 418K), but investors rare still worry about the impending debt ceiling deadline.
Even believing there will be a last-minute deal on the debt ceiling, the head of China's Dagong rating agency still plans to cut its U.S. rating soon. The only question will be the size of the move.
The majors trade without certain direction with the Nasdaq is pacing today's gains (+0.1%), while the S&P and Dow are holding some losses. Participants are now taking about pending home sales for June improved 2.4% month over month. The consensus among economists had actually called for a 3.0% slip.
EUR/USD $1.4350, $1.4400, $1.4500
U.S. stocks were set to open little changed Wednesday, as investors worried about the impending debt ceiling deadline, and lawmakers showed little evidence they are moving closer to a deal.
On Thursday, the House will vote on the debt ceiling plan favored by Republicans. Even if the measure passes, it is expected to die in the Senate, and President Obama has threatened to veto it.
Economy: The Labor Department reported 398,000 Americans filed for initial unemployment benefits last week (the first time claims have dropped below 400,000 in more than three months). Economists had expected 415,000 claims.
Investors are also looking ahead to Friday's monthly GDP report. The government will report how much the economy expanded in the second quarter.
A survey of economists forecasts the economy grew only at a 1.8% annual rate in the second quarter, which would be a slight slowdown from the first quarter, when it grew 1.9%.
Companies: Oil producer Exxon Mobil (XOM, Fortune 500) reported earnings per share of $2.18, missing analyst estimates of $2.33 per share. Revenues came in at $125.4 billion, up from $92.5 billion over the same period last year. Shares dropped more than 1% in premarket trading.
Investors will also get results from MetLife (MET, Fortune 500) and Starbucks (SBUX, Fortune 500) after Thursday's closing bell.
USD/JPY gets higher to current Y77.85 as the dollar finds some support. Resistance placed at Y78.15/20. Small stops in place through Y77.65 and barrier interest at Y77.50.
EUR/JPY also extending recovery from earlier lows on Y110.82. Cross currently holds at Y111.11. Volumes are light. Bids remain at Y110.70/60 and Y110.20.
07:55 Germany Unemployment (July) seasonally adjusted -11K +3K -8K
07:55 Germany Unemployment (July) seasonally adjusted, mln 2.957 - 2.968 (2.967)
07:55 Germany Unemployment rate (July) seasonally adjusted 7.0% 7.0% 7.0%
07:55 Germany Unemployment (July) seasonally unadjusted, mln 2.939 - 2.893
07:55 Germany Unemployment rate (July) seasonally unadjusted 7.0% - 6.9%
09:00 EU(17) Economic sentiment index (July) 103.2 104.0 105.4 (105.1)
09:00 EU(17) Business climate indicator (July) 0.45 0.85 0.95 (0.92)
10:00 UK CBI retail sales volume balance (July) -5% 4% -2%
The Swiss franc and the yen held close to recent highs against the dollar on Thursday amid US debt ceiling worries that stoked haven demand for both currencies.
Ongoing anxiety over eurozone government debt also added to market nervousness, weighing on the euro.
The Australian and New Zealand dollar, both of which hit record highs against the dollar on Wednesday were also in demand. Some analysts said the two currencies were displaying haven characteristics amid continuing worries over US and eurozone finances.
EUR/USD tested resistance at $1.4400, but failed to break above. Later rate fell to the lows around $1.4250, triggering some stops and bids.
GBP/USD was under pressure after the release of dissapointing CBI report (-5% in July). Rate fell to $1.6290 before recovered to $1.6322.
USD/JPY slowly recovers from lows on Y77.60.
US data starts at 1230GMT when initial jobless claims are expected to rise 2,000 to 420,000 in the July 23 week after see-sawing in the previous weeks. Seasonal adjustment difficulties related to the usual auto retooling period should continue to be a factor.
EUR/JPY continues to weaken, holding around Y111.00. Cross remains under pressure amid rumours that the Italian PM Berlusconi and Finmin Tremonti have both resigned.
USD/JPY holds around Y77.75, recovering from earlier lows around Y77.60. Bids remain at Y77.50, where option barrier is. Further stops are seen on a break of this level ahead of another barrier at Y77.00.
EUR/USD $1.4350, $1.4400, $1.4500
Nikkei 9,901 -145.84 -1.45%
Hang Seng 22,515 -26.32 -0.12%
S&P/ASX 4,464 -73.59 -1.62%
Shanghai Composite 2,709 -14.71 -0.54%
Resistance 3: Y79.00 (Jul 21 high)
Resistance 2: Chf0.8180 (close price of the last week)
Resistance 3: $ 1.6470 (Jun 7 high)
Resistance 3: $ 1.4540 (Jul 26-27 high)
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