Euro The euro fluctuates around 1.31 dollars in Asian trading hours today before Greece’s Prime Minister Lucas Papademos resumes negotiations with creditors and European officials about the debt-swap deal and austerity measures. Greek authorities have already agreed to reduce spending by an amount equal to 1.5% of the nation’s GDP in 2012, but still there are some more requirements to be discussed so that Greece could receive more financial aid. In the morning the single currency traded in a narrow range 1.3088-1.3136, compared with Friday’s close at 1.3145. Japanese Yen The yen weakened a bit more against the US counterpart today after the Ministry of Finance confirmed that Japan sold more national currency in November, following an 8 trillion-yen intervention on October 31, when the yen climbed to a post-war high of 75.35 per dollar. The November “stealth” operations totaled 1.02 trillion yen, the Ministry reported on its web site. At the same time Japanese Finance Minister Jun Azumi reiterated today that he “won’t rule out any option” to prevent excessive speculative moves of the national currency. Pair USD/JPY rose in Asian trading hours from 76.51 to 76.77 after falling last week to a three-month low 76.02. Australian Dollar The aussie gained ground and strengthened against the greenback from 1.0701 to a new six-month high 1.0812 after the Reserve Bank of Australia unexpectedly decided to keep its benchmark interest rate unchanged at 4.25%. In a statement after the policy meeting the central bank’s governor Glenn Stevens said that “financial market sentiment… has generally improved since early December” despite continuing uncertainty around Europe. He underlined that “information on the Australian economy continues to suggest growth close to trend” and concluded that easier monetary policy would be appropriate “should demand conditions weaken materially.”

US Dollar On Friday investors were encouraged by the US employment statistics and boosted demand for stocks, sending the nation’s indices higher. S&P 500 gained 1.46% after Labor Department reported that companies added 243000 jobs in January, considerably more than economists initially estimated. At the same time unemployment rate decreased to 8.3%, reaching the lowest level in three years. The dollar strengthened against the yen, the franc and the pound as improvements in the labor market may suggest there is no urgency in additional stimulus package from the Fed. The loonie, as the Canada’s currency is nicknamed, advanced against the greenback to a three-month high (pair USD/CAD dropped to 0.9926), after the reading of favorable economic data in the US, the Canada’s biggest trading partner. Euro The euro was flat on Friday against the US counterpart, fluctuating around 1.3150, but fell below 1.3100 in Asian trading hours today amid continuing uncertainty over the Greek debt issue, as Greek policymakers failed to agree on further spending reduction required by international creditors. Luxembourg Prime Minister Jean-Claude Juncker said in an interview “If we determine that it’s all going wrong in Greece, then there won’t be a new program … and that means in March you’ll have a declaration of bankruptcy.” The euro slid to 1.3054 by the end of Asian trading hours before France sells 8.5 billion euros of bills today. Australian Dollar After touching on Friday its six-month high against the US dollar – 1.0795, the aussie fell back toward 1.0700 in Asian trading hours. A report showed today retail sales dropped unexpectedly in January by 0.1%, increasing the probability of an interest rate reduction by the Reserve Bank of Australia. The cash rate is currently at 4.25% and may be cut tomorrow to 4% for the third straight time if central bank decides to ease further its monetary policy.

US Dollar The dollar gained some ground yesterday against its major peers, but was almost flat in Asian trading hours today before several macroeconomic reports are issued in the United States. In a speech to the House Budget Committee the Fed’s President Ben Bernanke underlined yesterday that “over the past few months, indicators of spending, production and job-market activity have shown some signs of improvement.” The Labor Department also reported that the number of initial jobless claims decreased by 12000 to 367000 in the week ended on January 28.

Today the data may show that companies hired 150000 employees in January, as economists predict on average, after adding 200000 workers in the previous month. Unemployment rate probably held at 8.5%. Other reports may show factory orders increased by 1.5% in December and the Institute’s for Supply Management non-manufacturing index rose from 52.6 to 53.2 in January, climbing to the highest level since August 2011. The dollar index fluctuates around 79 before the data is released. Euro The euro was mixed this week, staying mainly above 1.31 and below 1.32 against the greenback as Greece has not reached yet a final agreement with private bondholders on a debt swap deal. Nevertheless any positive news from negotiations may provide the single currency with additional support and drive it to retest its 7-week high 1.3220. Moreover investors will be closely watching today the region’s retail sales figures reading. According to preliminary estimation, the measure may have advanced by 0.3% in December after a 0.4% drop one month earlier, but the annual growth pace may still remain negative (at -1.3%). Swiss Franc The Swiss franc has closely approached its cap against the euro, which is pledged to be defended by the Swiss National Bank. This week pair EUR/CHF dropped to almost a five-month low (1.2029), just 29 points above the central bank’s floor, amid continuing discussions on Greece’s debt burden. The franc was little changed yesterday after reports showed that the nation’s trade balance surplus decreased from 2.95 billion francs in November to 2.07 billion in December, but the annual figure for 2011 rose to a record of 23.8 billion, exceeding the previous value by 22%. Canadian Dollar The loonie, as the currency is called, lost ground against the US counterpart after Statistics Canada reported that employers added fewer jobs in January than economists initially estimated – the number of people employed increased by 2300, instead of 24000. “Both full-time and part-time employment were essentially unchanged in January”, the department said in a statement, while the unemployment rate increased from 7.5% to 7.6%. Pair USD/CAD was actually little changed today, but accelerated above parity after the jobs report, compared with yesterday’s close at 0.9991.

US Dollar The dollar lost ground yesterday against the major counterparts as investors boosted demand for higher-yielding assets after reports from Europe, from the US and China showed manufacturing grew in January, boosting confidence the global economy is recovering. The Institute for Supply Management reported its manufacturing index rose in January to 54.1 from 53.1 in December, while construction spending increased by 1.5% in December, showing the biggest gain in the previous several months. The dollar index dived to the lowest level since December 9 – 78.62 and remained below 79.00 in Asian trading hours today. Japanese Yen The yen is extending its 5-day rally against the greenback. Pair USD/JPY fell yesterday to the lowest level since October 31 – 76.02 and traded this morning close to 76.00. The Japan’s finance minister Jun Azumi told reporters today according to Bloomberg that “Speculative moves are increasing in the market and we can’t overlook them.” He also mentioned that with the Fed’s pledge to keep low rates until 2014 “short- term speculative buying” of the yen has intensified. The single currency looks more stable against the yen. Pair EUR/JPY remains slightly above 100.00. Australian Dollar The Australian dollar strengthened considerably against the greenback yesterday and even touched today its highest level since the beginning of September 2011 – 1.0759. The rally is supported by the general investors’ optimism and after reports showed the nation’s trade balance surplus increased in December more than economists projected. The Bureau of Statistics reported that exports exceeded imports by 1.7 billion Australian dollars, a rise of 366 million on the surplus in November.

US Dollar The dollar strengthened against the major counterparts, except the Japanese yen, in Asian trading hours today as investors seem to be disappointed with the Greek debt talks progress with its private creditors. The dollar index rose to 79.57 from a 7-week low 78.74. Nevertheless the US currency fell to another lowest level since October 31 against the Japanese yen, touching this morning the level 76.11. Today the data may show that manufacturing in the US expanded in January more than in the previous month. According to preliminary estimations, the Institute for Supply Management’s factory index may increase to 54.5 from 53.1 in December. Euro The euro is weaker against the greenback and the yen as Greece is still failing to reach an agreement with private creditors. However the nation’s finance minister Evangelos Venizelos reiterated yesterday that they are “one step from closing” a debt-swap deal, and added that the government must complete talks with the IMF and the EU about a new financial aid package by February 5. The euro fell to a 5-day low versus the dollar in Asian trading hours (1.3025) before Portugal’s 105-day and 168-day bill auction today. Australian Dollar The Australian dollar looks more stable against the US counterpart than the single currency, as the aussie is trading close to a 3-month high 1.0690. Despite stronger-than-expected drop in house prices, the currency was supported today after the data showed that China’s (the South Pacific nation’s biggest trading partner) manufacturing indexes increased in January to 50.5 from 50.3 in December. Pair AUD/USD was close to 1.0600 in Asian trading hours. Canadian Dollar The Canadian dollar is also almost flat against the greenback. Pair USD/CAD failed to consolidate below parity yesterday after Canada’s gross domestic product unexpectedly declined in November by 0.1%, while the annualized growth pace fell to 2.0% from 2.7%. Today the pair traded in a narrow range between 1.0015 and 1.0050.

US Dollar The dollar lost ground against the majors today, undermined by the Federal Reserve pledge to keep low rates until 2014 and after Greek prime minister indicated more progress in negotiations with private creditors. Investors boosted demand for higher-yielding currencies – the Australian and Canadian dollars are both targeting their three-month highs. After recovering slightly yesterday to 79.45, the dollar index dropped toward its 7-week low at 78.77. Euro Asian stocks advanced and the rally in global stock markets may continue in European trading hours as Greek Prime Minister Lucas Papademos said he had a strong commitment to reach a deal with private creditors by the end of the week. At the same time the leader of the European Union agreed on Monday to impose tighter budget discipline, including keeping budget deficit on average at 0.5% of GDP and setting a limit for government debt at 60% of GPD. Britain and the Czech Republic refused to sing the pact.

The euro stays between 1.31 and 1.32 against the greenback before a report that may show unemployment in the euro area increased in December. According to preliminary estimations, the jobless rate increased from 10.3% to 10.4%, the highest level since 1998. In comparison the measure for Germany is expected to stay at 6.8%. Japanese Yen Japanese yen is strengthening against the dollar – pair USD/JPY has already touched today its lowest level since October 31 – 76.17. The data for Japan was somewhat mixed today. The nation’s industrial production grew in December more than economists expected, by 4% instead of 3%, while the unemployment rate increased from 4.5% to 4.6%. Japan’s finance minister Jun Azumi said today that the authorities are ready to act and take “decisive” steps to prevent excessive currency’s moves that hurt the economic recovery.

US Dollar Asian stocks turned to the negative territory on the first trading day of the week before European leaders meet in Brussels to discuss the region’s debt crisis. On Friday the data showed that the US economy expanded by 2.8% annualized in the last quarter of 2011, compared with estimations of a 3% gain. The dollar recovered today a part of its previous week’s losses and strengthened against all the majors except the Japanese yen. The dollar index, which tracks the US unit against a set of six currencies rose from the Friday’s 7-week low 78.77 to 79.15. Euro After touching on Friday its highest value against the greenback since December 13 (1.3220), the euro slid below 1.32 in Asian trading hours today. Today investors focus attention on the EU summit, the first one in 2012. At the same time investor’s confidence will be tested at Italian debt auction of securities maturing in 2016, 2017, 2021 and 2022 after Fitch Ratings downgraded six eurozone sovereigns on January 27, including Italy and Spain. Italy’s rating was lowered by two levels to “A-” from “A+”, while Spain’s was cut from “AA-” to “A”, also by two levels.

US Dollar Yesterday the US currency extended losses against the majors before some weaker than expected economic reports boosted demand for the main reserve currency. The Labor Department figures showed the number of initial jobless claims increased by 21000 last week to 377000, while new home sales unexpectedly fell in December by 2.2%. The euro rose to a 5-week high against the greenback (1.3185), but traded in a narrow range 1.3077-1.3120 this morning amid continuing talks between Greece and its private creditors and before US economic growth data. According to preliminary estimations, the nation’s economy advanced in the fourth quarter by 3.0% in annual figures. Japanese Yen The yen traded in a wide range against the dollar this week. Pair USD/JPY climbed from 76.85 on Monday to 78.30 on Wednesday, but failed to maintain gains, sliding toward 77.00 by the end of Asian trading hours today. The euro also weakened versus the Japanese currency from a 5-week high 102.20 to 101.00. Today reports showed that Japan’s retail sales grew in December at the fastest pace in more than a year, indicating an increased consumers’ activity. The measure rose by 2.5% annualized and by 0.3% in the last month of 2011, the Trade Ministry reported. Euro The single currency gained some ground against the US dollar in European trading hours today as European Union Economic and Monetary Affairs Commissioner Olli Rehn said at the World Economic Forum in Davos, Switzerland, that Greece and private creditors are “close” to reach a deal “preferably still in January rather than February.” Furthermore sovereign debt markets are also supportive for the euro. Today Italy raised 11 billion euros in 182 and 331-day bill sales, while the average weighted yield of 6-month debt securities resulted to be the lowest in 8 months – 1.97%.

Spain however reminded investors that the economic situation is far from being stable. The nation’s unemployment rate surged to 22.9% from 21.5%, reaching the highest level in 17 years and the highest in the euro zone. Spain’s Economy Minister Luis de Guindos underlined that unemployment “is the main source of vulnerability of the Spanish economy and this is something that we hope to start to fix in the short term.” The euro traded today at 1.3077-1.3162, below yesterday’s high 1.3185.

US Dollar Yesterday the Open Market Committee of the US Federal Reserve System said in a statement, which followed a two-day policy meeting, that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” Moreover the Fed Governor Ben Bernanke told reporters in the aftermath that policy makers are “prepared to provide further monetary accommodation if employment [currently at 8.5%] is not making sufficient progress towards our assessment of its maximum level, or if inflation shows signs of moving further below its mandate-consistent rate [of 2%].”

The target range for the federal funds rate was kept at 0%-0.25% and the central bank’s economic growth forecast for 2012 was lowered to a range of 2.2%-2.7%, compared with the previous projection of 2.5%-2.9%. All in all, the message negatively affected the US dollar, as it weakened against all the major counterparts. The dollar index, which tracks the US unit against a basket of 6 currencies, fell at the beginning of the European trading session today to a 5-week low 79.3. Australian/Canadian Dollar The aussie and the loonie, as the two currencies are nicknamed, strengthened considerably against the US counterpart after the FOMC statement was released. Both units climbed to more than 12-week highs against the greenback: pair AUD/USD closed yesterday at 1.0590, having gained more than 100 points, and even touched 1.0650 at the beginning of the European session today; pair USD/CAD has almost reached parity this morning, touching the lowest level since November 1 – 1.0009.

Japanese Yen The yen extended losses today against all the majors after Japan reported its first annual trade deficit in more than 30 years. The Ministry of Finance data showed the nation’s imports exceeded exports by 2.49 trillion yen in 2011 (around 32 billion dollars), as the value of exports dropped for a third consecutive month in December, by 8%. Pair USD/JPY rocketed yesterday from 76.95 to 77.84 and even touched a four-week high 78.00 in Asian trading hours today. The euro is gaining ground against the yen for a third consecutive day and has already strengthened to a four-week high as well at 101.65. Australian Dollar The Australian Bureau of Statistics reported today the consumer prices were unchanged in the fourth quarter of 2011, after rising by 0.6% in the third quarter. As a result the annual growth pace of the measure declined to 3.1% from 3.5%. Nevertheless the aussie managed to recover its yesterday’s losses and climbed from 1.0445 to 1.0540 against the greenback this morning as the nation’s core inflation accelerated more than economists expected. The so-called trimmed mean, one of the central bank’s measures of underlying inflation, advanced by 0.6%, compared with estimations of a 0.5% gain. British Pound The Office for National Statistics reported today the UK economy stagnated in the fourth quarter more than economists initially estimated. The nation’s GDP dropped by 0.2% in the last three months of 2011, after a 0.6% gain in the third quarter. The data followed yesterday’s speech of the Bank of England Governor Mervyn King who said that the Bank may increase stimulus to support the economy, while the minutes of the latest policy meeting issued today also confirmed that more stimulus is “likely” according to some officials, as “inflation would continue to fall sharply in the coming months.” The pound fell from a three-week high versus the dollar (1.5630) toward 1.5530.