The dollar is little changed during Tuesday's session. There have been relatively few noteworthy developments today, but concerns over the debt situation in Spain have remained. Investors are also looking forward to the weekend, when the second round of elections in Greece will take place. The result could determine whether Greece remains a member of the Eurozone, or makes an exit.
Making the firewalls higher and higher will not resolve the crisis, Bundesbank Board member Andreas Dombret said Tuesday. A firewall cannot extinguish a fire. It only buys time until sustainable measures become effective, Dombret said in a speech at the Bank of America Merrill Lynch Global Macro Conference.
It is not the task of the euro system to substitute for national fiscal policies, the central banker said. Greece should stick to the agreed austerity and structural reform measures. "There is no basis for external aid without the agreed reform program," he added.
The European Central Bank as well as the 17 national central banks in the currency bloc should be empowered to monitor and supervise banks with cross-border presence, Governing Council member Christian Noyer wrote in an op-ed published in the Wall Street Journal Tuesday.
European Commission President Jose Manuel Barroso has urged all the 27 European Union members to consider a single cross-border supervisor for their banks in order to form a banking union, which could be enacted as early as next year.
The dollar has remained basically flat in comparison to the Euro on Tuesday, hovering around $1.2480.
France's non-farm payroll employment rose modestly in the first three months of the year, final data released by the statistical office INSEE confirmed Tuesday. Payroll employment in the principally market sectors, which includes manufacturing, construction and services, edged up 0.1 percent quarter-on-quarter, reversing a similar fall in the previous three months. The figure matched the preliminary estimate.
Spain's leading economic index decreased notably in April, data from a survey by the Conference Board showed Tuesday. The leading economic index decreased 1.6 percent on a monthly basis to 102.6 in April, after dipping a revised 0.9 percent in March. All of the six components of the leading index made negative contributions.
The greenback has pulled back versus the pound sterling on Tuesday and is now testing yesterday's low, trading around $1.5565.
U.K. manufacturing output dropped more-than-expected at the start of the second quarter, lifting chances of the economy going into a longer recession. Manufacturing output dipped 0.7 percent month-on-month in April, reversing March's 0.9 percent rise, the Office for National Statistics said Tuesday. The latest decline far exceeded economists' forecast of 0.1 percent fall.
The Japanese yen is moderately overvalued from a medium-term perspective, the International Monetary Fund said Tuesday. The lender urged the central bank to expand asset purchases. The asset-purchase program could be expanded 'substantially' beyond current plans to increase the likelihood of achieving the 1 percent inflation goal by 2014, it said.
The buck climbed slightly in overnight trading versus the Yen, but has begun to give back some of those gains on Tuesday. The U.S. currency is now trading around the $79.400 level, near the middle of a week-long range.
Driven by a steep drop in fuel prices, U.S. import prices fell sharply in May, according to figures released Tuesday by the Labor Department, while prices for U.S. exported goods fell for the first time in 2012. The overall price index for U.S. imports fell by 1 percent in May, marking the largest monthly drop since June of 2010. Most economists, however, had expected a somewhat bigger 1.1 percent decline in the costs of imported goods.
Export prices, which had increased by 2 percent over the first four months of the year, fell 0.4 percent in May, the first monthly decline of 2012. The drop surprised economists, who had expected an increase of 0.1 percent.
by RTT Staff Writer
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