The dollar is little changed versus its major competitors on Monday. The currency is down slightly against the Japanese Yen, but is basically unchanged against the Euro and pound sterling.
Germany's Spiegel magazine reported Sunday, without mentioning its sources, that the European Central Bank is considering setting limits on yields of Eurozone sovereign bonds,. The central bank will intervene and buy the bonds if their interest rates exceed a pre-determined threshold above German bonds, the magazine said.
Germany's central bank on Monday reiterated its opposition to the European Central Bank's plan to purchase government bonds. The decision to share solvency risks should be taken by governments, and not by central banks, Bundesbank said in its latest monthly report.
The European Central Bank later rejected the magazine report. A spokesperson said that it was "absolutely misleading to report on decisions, which have not yet been taken and also on individual views, which have not yet been discussed by the ECB's Governing Council."
The German economy is likely to see a slower growth rate during the rest of this year, the Finance Ministry said in its latest monthly report released Monday.
Declining demand from the euro area economies is weighing on German economy, the Ministry said in the report. It noted that leading indicators point to a certain weakening of export momentum in the course of the year.
Greek Prime Minister Antonis Samaras is expected to meet some of the leaders of the currency bloc this week to request an extension of its fiscal consolidation program, reports said over the weekend. Samaras is expected to put forward a request for a two-year extension for the country's fiscal adjustment program.
Samaras will be visiting Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro-area finance ministers, by the middle of this week. He will then travel to Berlin on Friday to meet German Chancellor Angela Merkel. The premier will also hold talks with French President Francois Hollande this week.
A Greek exit from the euro area would be manageable, but would be expensive, European Central Bank Executive Board member Joerg Asmussen was quoted as saying on Monday.
In an interview with the Frankfurter Rundschau, Asmussen said the Greek exit would be associated with reductions in growth and higher unemployment. An exit "would not be as orderly as some imagine," he said.
The dollar rose to a high of $1.2294 versus the Euro, but has since eased back to around $1.2340, nearly unchanged on the day.
Eurozone construction output declined for the third consecutive month in June, Eurostat reported Monday. In the construction sector, seasonally adjusted production dropped 0.5 percent from a month ago, when it fell 0.2 percent.
The greenback has also held nearly flat in comparison to the pound sterling, holding steady around $1.5700.
The U.K. household finance index rose for the third consecutive month in August, reaching the highest level since December 2010, a survey from Markit Economics showed Monday. The index came in at 38.9, up from 37.5 in July.
The buck has weakened a bit versus the Japanese Yen on Monday, following last week's sharp increase. The U.S. currency has pulled back from a high of Y79.650, to around Y79.390.
Japan's leading index for June was revised up to 93.2 from 92.6, final data released by the Cabinet Office showed Monday. Despite an upward revision, the index measuring the direction of the economy in the months ahead, fell for the third consecutive month.
by RTT Staff Writer
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