Wednesday, September 24, 2008

Euro extends gains against most majors, hits 2-day high against franc, Wednesday, September 24, 2008 3:29:33 AM

The European currency extended its Asian session gains against the US dollar, the Swiss franc and the Japanese yen. The euro thus reached a 2-day high against the franc. On the other hand, the euro showed choppy trading against the British pound.

The industrial economic situation in France deteriorated further, a monthly business survey published by the statistical office INSEE showed today. The business confidence index eased to 92 in September from 97 in July. The indicator stands eight points below its long-term average and the expected level of 97 in September.

Against the US dollar, the European currency edged higher to 1.4710 during early Asian deals on Wednesday. Thereafter, the euro slipped slightly but rebounded after hitting a low of 1.4648 at 2:05 am ET. The euro-dollar pair is currently trading at 1.4688, compared to 1.4652 hit late New York Tuesday.

The European currency largely bounced between 0.7925 and 0.7909 against the British pound during today`s early deals. The pair is currently trading at 0.7915, compared to 0.7912 hit late New York yesterday.

Against the Swiss franc, the European currency traded higher during early deals on Wednesday. At 3:00 am Eastern Time, the euro-franc pair reached a 2-day high of 1.5971. This may be compared to Tuesday`s closing value of 1.5917.

The euro extended its Asian session gains against the Japanese yen during early European deals on Wednesday. The euro-yen pair is currently trading at 156.18, compared to Tuesday`s closing value of 154.66.

An index that measures Japanese all-industry business conditions in Q3 was down 10.2 percent compared to the previous quarter, the Ministry of Finance said today in its business survey index. That was higher than the -15.2 percent quarterly decline in Q2.

At 4:00 am Eastern Time, the German research institute Ifo is expected to release results of its business climate survey for September. The expectations index is forecast to climb to 87.3 from 87 recorded in August. The business climate index is expected to log 94.1,down from 94.8 in the previous month. At the same time, the current assessment index is predicted to decline to 101.9 from August`s 103.2.

Elsewhere, the European Central Bank is slated to release the Eurozone current account data for July. In June, the seasonally adjusted current account balance had recorded a deficit of EUR8.2 billion. Meanwhile, the unadjusted current account balance was a deficit of EUR1 billion.

The Italian statistical office ISTAT is also expected to release its report on July retail sales at 4.00am ET. Retail sales are expected to increase 0.1% on a monthly basis, reversing a 0.1% rise seen in June. Year-on-year, retail sales are forecast to decline 0.8%, after recording a much bigger fall of 3.4% in June.

The economic reports scheduled for release in the U.S. include existing home sales for August and MBA mortgage applications for September. Additionally, investors may focus on Fed Chairman Ben Bernanke`s testimony at Congress` joint economic committee.


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