The U.S. dollar traded in a relatively flat range overnight as competing market events pulled the greenback in opposite directions. European equities have risen nearly 1.0% in early trading and U.S. stock futures point towards a higher open, dampening demand for the safe-haven greenback. However, Asian indexes have pushed sharply lower on possible instability in the region after North Korean state television said leader Kim Jong Il died on Saturday. Kim, 70, died of exhaustion, the official Korean Central News Agency said. His death ended a 17-year tenure in which North Korea built nuclear weapons while some 2 million of its people died from famine. Meanwhile, today’s economic docket remains light with only the NAHB Housing Market index at 10 a.m. Tomorrow sees the release of housing starts, followed by existing home sales on Wednesday. Gross domestic product, weekly jobless claims and consumer sentiment are set for Thursday, while durable goods orders, personal incomes and new home sales will round out the week on Friday before the Christmas weekend. All markets will be closed on Monday, December 26th.
The Euro held in familiar ranges overnight before France plans to sell as much as 7 billion euros of bills today and Spain holds an auction of securities tomorrow. On Friday, Fitch Ratings lowered its outlook for France’s credit ranking to negative to stable, saying the country’s budget deficit and government borrowings make it more vulnerable to the region’s debt crisis than other top rated euro-zone countries. Spain and Italy were also put on review for a possible downgrade. European finance ministers will hold a conference call today to discuss 200 billion euros in additional funding through the International Monetary Fund. There was no major economic data released in the Euro-zone today.
The Japanese yen dropped against the dollar for the first time in three days amid concern a destabilization of the Korean peninsula will dim the outlook for Japan’s economy and security. The modest decline trimmed the yen’s gain this year to 4.1% against the U.S. dollar. Japan’s currency has advanced 4.8% in 2011 against the nine-developed-nation counterparts, according to Bloomberg Correlation-Weighted Indexes, as investors sough the safest investments amid Europe’s sovereign debt crisis. The dollar is the next best performer, strengthening 1.8%.
The British pound was mostly unchanged against the U.S. dollar overnight but has come under modest pressure as a report showed U.K. home sellers cut asking prices for a second consecutive month, adding to signs the economy is losing momentum. Rightmove Plc said prices in England and Wales fell 2.7% from November, and added that the property market will remain “challenging” in 2012. The data follows last week’s reports that showed unemployment surged and retail sales fell more than economists forecast in November, strengthening the case for the Bank of England to add to its asset-purchase program.
