The dollar has added to its recent gains versus the Euro on Tuesday, but is little changed in comparison to the pound sterling. The U.S. currency has also retreated a bit in comparison to the Japanese Yen. There has been little news today driving the markets, with the exception of the better than expected data from the U.K.
Eurozone finance ministers on Monday endorsed the European Commission's recommendation to extend the deadline for the correction of the excessive deficit in Spain by one year to 2014. The Eurogroup said it will also negotiate a bailout program with Cyprus in the coming months.
In a statement, the ministers said "the Eurogroup has reached a political understanding on the draft MoU underlying the financial assistance for the recapitalisation of financial institutions for Spain." Also, the ministers agreed to offer Spain EUR 30 billion to help the country's troubled lenders.
The greenback bounced back from a 2-session low of $1.2333 Tuesday morning, to a 2-year high of $1.2234.
Production by the French industrial sector declined more than expected in May, reflecting overall weakness in economic activity and falling demand both domestically and globally. Industrial production declined 1.9 percent month-on-month in May, data from the French statistical office Insee showed Tuesday. This reversed the 1.4 percent increase in April and was more than the 1 percent drop expected by economists.
The uncertainty over the future of Eurozone debt crisis is damaging activity around the world, Bank of England Governor Mervyn King reportedly said in an interview with the BBC. King said there is a great black cloud of uncertainty hanging over business. Now businesses are deterring investment and hiring activities.
The dollar also bounced back from a 2-session low of $1.5548 versus the pound sterling this morning, back to around the $1.5500 level.
U.K. manufacturing and industrial production increased unexpectedly in May helped by an additional working day, the Office for National Statistics said Tuesday.
Manufacturing output grew 1.2 percent month-on-month, offsetting a 0.8 percent drop for April. The increase was in contrast to 0.1 percent fall expected by economists.
Likewise, industrial production logged a surprise growth of 1 percent in May from a month ago, when it fell 0.4 percent. Economists had forecast a 0.2 percent fall for May.
The buck slipped to Y79.202 versus the Japanese Yen this morning, its lowest level since June 28th, but has since rebounded back to around Y79.465.
Consumer confidence in Japan deteriorated slightly in June, after improving in the previous month, data released by the Cabinet Office showed Tuesday. The seasonally adjusted consumer confidence index dropped to 40.4 in June from 40.7 in May. Economists expected the index to remain unchanged.
by RTT Staff Writer
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