The dollar traded near a two-week high against the euro after the
Senate agreed to vote tonight on a $700 billion bank rescue plan that
may spur lending and support growth in the world's largest economy.
The U.S. currency yesterday jumped by the most in seven years after
Senate leaders vowed to revive a bill to buy distressed assets,
legislation that was rejected two days ago by the House of
Representatives. The euro slid against the yen after Dexia SA became
Europe's fourth lender this week to be bailed out by the region's
governments.
The U.S. Senate has set a vote for tonight on legislation that would
give Treasury Secretary Henry Paulson broad authority to buy troubled
assets from financial companies. Senators plan to include a provision
that would raise the limit on federal insurance for bank deposits to
$250,000 from $100,000, a move demanded by some of the rescue plan's
critics.
The euro traded near a two-week low against Japan's currency on
speculation European governments will bail out more banks after France
and Belgium yesterday led a state-backed rescue of Dexia, the world's
biggest lender to local governments.
Belgium, the Netherlands and Luxembourg rescued Fortis, the largest
Belgian financial-services company, the U.K. took control of Bradford
& Bingley Plc, the country's biggest lender to landlords, and
Germany bailed out Hypo Real Estate Holding AG in the previous two
days.
EUR/USD it was consolidated within the limits of $1,4060-$ 1,4160.
GBP/USD has been limited by frameworks $1,7780-$ 1,7870.
USD/JPY having established session low on Y105,60, has raised above level Y106,00.
European data for Wednesday sees the release of the state
manufacturing PMI releases, leading up to the Eurozone number at
0800GMT. Further Eurozone data at 0900GMT is expected to see the
unemployment rate at 7.3%. Also at 0900GMT, ECB President Jean-Claude
Trichet is due to participate in a debate at the Conference on Salary
in Europe, in Brussels.
UK data sees the September CIPS manufacturing PMI release and
index of services data, both at 0830GMT. The PMI is expected to
deteriorate further to a reading of 45.0.
US data should sees at 1215GMT by the ADP National Employment Report for September.
Further US data at 140GMT sees construction spending for September and
the ISM manufacturing index for September as well as the help-wanted
online index for September. The ISM manufacturing index is forecast to
fall to a reading of 49.0 in September. Construction spending is
expected to fall 0.3% in August, pulled down by the continued cuts in
private residential building. Data also sees the weekly crude oil
stocks data at 1435GMT.