The yen rose against all of the other major currencies as a drop in global stocks raised speculation that investors will reduce holdings of higher- yielding assets and pay back loans in Japan.
The budget deficit will grow next year to a record $438 billion, the Congressional Budget Office said, making it harder for President George W. Bush's successor to either cut taxes or increase spending. This year's shortfall will total $407 billion, the agency said today in a biannual report. The Bush administration estimated in July that next year's deficit will total $482 billion.
The National Association of Realtors said that its index of pending home resales in the U.S. fell 3.2% in July in its fourth decline this year after a revised 5.8% gain in previous month.
Royal Bank of Scotland Group Plc cut its forecasts for the euro versus the dollar. The single currency will end the year at $1.40 before weakening to $1.35 by the end of the first quarter of 2009, it said. The bank's previous predictions were $1.50 and $1.45, respectively.
EUR/USD fell to $1.4040 before it rebounded to $1.4200. But rate failed to break above the figure and retreated to $1.4050. Later euro refreshed session highs around $1.4230 and sharply retreated to $1.4100.
GBP/USD fell from $1.7630 to $1.7500 before it rebounded to $1.7700. But rate failed to break above the figure and back off to $1.7560.
USD/JPY fell from Y108.20 to Y106.60.
In Europe attention will be on UK Trade balance with analysts expect deficit at stg7.5 bln in July.
At14:35 GMTOilstocksinventorieswillbereleased.