The euro snapped a two-day decline against the dollar on growing speculation the European Central Bank will raise interest rates next month while the Federal Reserve leaves borrowing costs unchanged. The 15-nation currency also traded near a seven-month high against the yen after ECB Executive Board Member Juergen Stark said the markets understood the bank's signal to raise borrowing costs next month. The yen fell as rising stocks fueled demand for purchases of higher-yielding currencies funded in Japan.
Beige book couldn't fuel any change to a market's breathe. "Economic activity remained generally weak in late April & May." Three districts described activity as weaker, 4 reported slower or sluggish growth, and the remaining 5 (Philly, Cleveland, Atlanta, St Louis, SF) said activity was stable or little changed. Consumer slowed, input costs rose, high energy prices damped tourism; mfg was soft, real estate weak, consumer lending softer; retail price reports were mixed. Report was prepared at Richmond Fed based on info gathered before June 2. The April beige book said "economic conditions have weakened since the last report," so the most recent reading is a bit improved.