EURUSD Back To 1.23

EURUSD Back To 1.23

The greenback has been steadily losing yesterday's gains throughout the Asian and London sessions. European equity indices rose by more than 2% and the relative strength winner is NZD while JPY lags.

Euro along with other currencies pushed slightly higher against the buck on two rumors. First was that the Spanish government would hold a press conference and ask for support from EFSF and the second that the ECB would hold a press conference on EFSF intervention.

UK services PMI declined to 51.0 in July from 51.3 in June which is the slowest growth in 19 months. Input prices rose despite falling fuel costs which increased the pressure on margins. Employment rose for the 8th month in a row and new work rose. GBPUSD reaction was minimal initially but later the pair pushed nearly to 1.56.

Eurozone retail sales grew only 0.1% in July from previous 0.8% m/m and declined further to -1.2% from -0.8% y/y. On a positive note, final prints of July services PMI were revised slightly higher in case of Germany it was from initial estimate 49.7 to 50.3 and for Eurozone from 47.6 to 47.9. EURUSD retraced a significant part of yesterday's gains and trades around 1.2280.

Spanish and Italian 10 year yields eased compared to yesterday's highs but remain elevated at 7.00% and 6.07% respectively.

The US session starts at 8:30 am ET with July NFP that is expected to rise to 101K from previous 80K while the unemployment rate is seen steady at 8.2%. Hourly earnings are seen lower at 0.2% from previous 0.3%.
The last report of the week is ISM non manufacturing at 10:00 am that is anticipated to remain at 52.1 in July.
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