24.07.2008 16:34

European session: Euro slips against Yen as German business confidence slumps [M]

The following data were issued
06:45FranceBusiness confidence (July) 98.0 100.0 101.0 (102.0)
07:00FrancePMI (July) flash 47.3 49.0 49.2
07:00FrancePMI services (July) flash 47.0 49.7 50.1
07:30GermanyPMI (July) flash 50.9 52.0 52.6
07:30GermanyPMI services (July) flash 53.3 51.5 52.1
07:30ItalyBusiness confidence (July) 83.5 - 86.7 (87.1)
08:00GermanyIFO business climate index (July) 97.5 100.3 101.3
08:00EU(15)PMI (July) flash 47.5 48.7 49.2
08:00EU(15)PMI services (July) flash 48.3 48.8 49.1
08:00EU(15)Current account (May) adjusted, bln-7.3 - +1.5 (-0.3)
08:00EU(15)Current account (May) unadjusted, bln-21.4 - -7.4 (-9.2)
08:30UKRetail sales (June) -3.9% -3.0% 3.6 (3.5)%
08:30UKRetail sales (June) Y/Y 2.2% 3.9% 8.1%

The euro dropped for a fourth day against the yen as business confidence in Germany, Europe's largest economy, fell the most since the 2001 terrorist attacks. Traders pared bets the ECB will increase interest rates a second time this year.
The dollar also rose to the highest in a month against the yen as the U.S. Senate considered a bill that allows Treasury Secretary Henry Paulson to bail out Fannie Mae and Freddie Mac, the two biggest U.S. mortgage-finance companies.
The pound slid to the lowest in more than a week against the dollar as U.K. retail sales fell in June by the most since at least 1986.The pound weakened from the highest level against the euro in seven weeks after British retail sales dropped in June by 3.9% as accelerating inflation prompted consumers to cut spending.

EUR/USD opened in early Europe around $1.5693. The weaker than expected German Ifo survey knocked the pair to fresh lows for the day at $1.5653 before rate recovered to $1.5685. Offers $1.5695/1.5710, lge exp $1.5710/25, bids $1.5635/30, $1.5620/10.

GBP/USD opened early Europe at $1.9975. Sterling came under pressure in earlyEurope. Cable met demand at $1.9920 containing initial dip. Weak UK retail sales dropped cable to $1.9835, recoveryrestricted by $1.9880. Cable bids $1.9835/25, $1.9800. Offers $1.9890/00, $1.9920,$1.9950/60.

USD/JPY opened in early Europe around Y107.85. Rate slipped back to make session lows at Y107.59, ending the morning at Y107.70. Dlr-yen offers Y108.00/20, Y108.40/60, stops above, bids Y107.50.

Dollar gains may be held back by reports today and tomorrow that are expected to add to evidence of a U.S. housing slump.
The National Association of Realtors will today say sales of previously owned homes fell to a 4.94 million annual pace in June, from 4.99 million in May, a survey showed. The Commerce Department will tomorrow report sales of new houses dropped to an annual pace of 503,000 from 512,000 in May, a separate survey shows.