The dollar is bouncing back from some recent weakness against its major European rivals on Monday. The Euro rallied late last week, after European Central Bank President Mario Draghi stated that the ECB is ready to do whatever it takes to preserve the euro. Investors are looking for some crucial action from the European Central Bank, which holds its rate-setting session later this week.
German Chancellor Angela Merkel and Italian Prime Minister Mario Monti have vowed to defend the euro amid escalating tensions in Eurozone, close on the heels of a similar agreement between Merkel and French President Francois Hollande.
During a telephone conversation on Sunday, Merkel and Monti agreed that both the countries “will do everything possible to protect the euro area,” reports said.
The dollar has rebounded from Friday’s 3-week low of $1.2389 versus the Euro, to around $1.2250 Monday.
Eurozone economic sentiment deteriorated more-than-expected in July due to lower confidence in all sectors and marked the fourth consecutive month of downturn. The economic sentiment index fell to 87.9 from 89.9 a month ago, survey data from the European Commission showed Monday. The reading was also below expectations for a score of 88.9.
German wholesale trade turnover rebounded in June after declining for the past three months, the latest figures from the Federal Statistical Office showed Monday. Wholesale sales increased 4 percent year-on-year in June following a 2.8 percent fall in May. In March and April, sales fell 1.1 percent and 0.9 percent respectively.
Spanish economic output sank further in the second quarter, deepening the recession in the euro area’s fourth largest economy, which is already hit by a banking sector crisis and the government’s tough austerity measures.
The gross domestic product fell 0.4 percent in the second quarter of 2012 after a 0.3 percent decline in the first quarter of 2012 and in the fourth quarter of 2011. The outcome was in line with the Bank of Spain’s estimates released early last week.
The greenback has also bounced back from Friday’s low of $1.5767 versus the pound sterling, to around $1.5675.
UK’s high street sales increased for the third consecutive month in July, but the rate of growth slowed from the previous month, data from a survey by the Confederation of British Industry (CBI) showed Monday.
The balance of the survey came in at 11 percent in July, with 44 percent of surveyed retailers reporting an increase in sales volumes and 33 percent reporting a decline. Economists were looking for a balance of 20 percent. The latest figure was also far below the 32 percent balance retailers had expected.
The buck has pulled back from Friday’s high of Y78.668 versus the Japanese Yen, back to around Y78.230 on Monday.
Industrial production in Japan was down a seasonally adjusted 0.1 percent on month in June, the Ministry of Economy, Trade and Industry said in Monday’s preliminary reading – contracting for the third consecutive month. The headline figure was well shy of forecasts for a 1.5 percent increase following the 3.4 percent contraction in May.