The U.S. dollar weakened versus nearly all of its counterparts as rising global stocks cut demand for the safety of U.S. assets. The greenback fell to a one week low against the Euro amid optimism that Greek lawmakers will pass their strict austerity package today. The U.S. dollar also tumbled against the Aussie and New Zealand dollars as the price of commodities rose. However, the Swiss franc slipped versus all of its peers after the nation’s economic barometer fell in June, adding to signs the franc’s ascent and a faltering euro-region economy may hurt economic growth. The monthly gauge that aims to predict the economy’s direction about six months ahead dropped to 2.23 from 2.30 in May. Meanwhile, the U.S. economic docket showed that mortgage applications decreased 2.7% from the prior week. Later, Pending Home sales in May are expected to jump 3.0%, after falling –11.6% in the month prior.
The Euro climbed to its strongest level in a week versus the U.S. dollar as investors bet Greek Prime Minister George Papandreou will scrape through approval of the controversial austerity measures even as protests raged and workers took to the streets in a general strike. Expectations are that the vote will be passed by a close margin, giving the Euro some near-term momentum. Papandreou has called lawmakers to “do their patriotic duty” and pass the bill, as well as a vote tomorrow to authorize implementation of the austerity plan, to ensure the debt-stricken nation can receive further rescue funds. Meanwhile, European confidence in the economic outlook dropped to the lowest in eight months in June. An index of executive and consumer sentiment in the 17-nation euro region fell to 105.1 from 105.5 in May, the lowest since October.
After falling modestly during yesterday’s trading session, the Japanese yen held a tight range against the U.S. dollar overnight. Japan’s industrial production rose at the fastest pace in more than 50 years, led by carmakers as they restored operations at plants after a record earthquake and tsunami on March 11th. Factory output increased 5.7% in May from April, the biggest gain since 1953 the Trade Ministry said in Tokyo today.
The British pound gained versus the U.S. dollar on general heightened risk appetite, but fell against most of its counterparts following poor economic data. Indeed, a report showed that U.K. mortgage approvals stayed near a four-month low in May. Banks granted 45,900 homes last month, failing to meet expectations of 46,300. The U.K. central bank has held its benchmark rate at a record low of 0.5% since April 2009 to support growth even as inflation accelerated to 4.5% in May, more than twice the government’s 2.0% target.
