The euro rose the most in three weeks against the dollar and yen
after European leaders agreed to guarantee bank borrowing and prevent
failures that would further batter the credit markets.
The U.S. currency fell versus the Mexican peso and Australian
dollar as the Federal Reserve and three other central banks announced
unlimited dollar auctions, reducing demand for the greenback for
funding among financial firms. Brazil's real, South Korea's won and the
peso led a rally in emerging-market currencies as the Group of Seven
nations pledged over the weekend to take ``all necessary steps'' to
stem the market turmoil.
Foreign-exchange movements may be exaggerated because trading volumes
are lower than normal due to public holidays in Japan, the U.S. and
Canada, according to Takashi Yamamoto, chief trader at Mitsubishi UFJ
Trust & Banking Corp. in Singapore.
The pound rose for the first time in four days, gaining 2.2
percent to $1.7423, as the U.K. government said it will invest in
banks. Royal Bank of Scotland Group Plc, HBOS Plc, and Lloyds TSB Group
will get 37 billion pounds ($64.4 billion), the government said in a
Regulatory News Service statement. The funding will allow the banks to
boost their so-called Tier One capital ratio to more than 9 percent.
European policy makers meeting in Paris yesterday pledged to guarantee
until the end of 2009 bank-debt issues with maturities up to five
years. Plans to recapitalize banks in the region will cost 300 billion
euros ($409.7 billion), according to Goldman Sachs Group Inc.
EUR/USD on results enough changeable session the pair could will
become stronger up to $1,3600, having shown before it a session high on
$1,3682.
GBP/USD the rate has established session low on $1,6923 then has
raised up to $1,7440. In the end of session the pair was corrected in
area $1,7300.
USD/JPY has established session low in the field of Y99,50, the pair could finish the tenders above level Y102,00.
UK inflation data is due at 0830GMT with the CPI expected to come in at
0.4% m/m, 5.0% y/y. This will mean CPI inflation reaches a fresh series
high in September and may break above 5% on the back of higher utility
bills.
Germany ZEW economic expectations index (October) is due at 0900GMT, expected to come in at -52.0.
E15 ndustrial production (August) is due at 0900GMT. Expected to come in at 1.1% m/m, -1.7% y/y.
At 1800GMT, the US Treasury is expected to post a $45.0 billion surplus
in the September tax month, leaving the full fiscal year gap much wider
than the 2007 fiscal year due to a decline in receipts and rising
outlays.