The euro climbed against the dollar in early Asian trading after the Greek parliament approved the second set of measures required for the bailout talks to start with its creditors. The second bill included new rules for the banking system as well as a new civil justice code. There were fears that more Syriza MPs might rebel against the prime minister than in the first bill but only 36 voted against or abstained, compared with 39 in the first vote. The euro reached a high of 1.0955 dollars before retreating slightly to 1.0938 dollars in late Asian session.
The dollar was flat against the yen in Asian session but held on to Wednesday’s gains on the back of strong existing home sales, trading just above 124 yen. Trade data for Japan had little impact on the yen as exports rose by 9.5% in June and imports were down by 2.9%. But shares in Tokyo were firmer and in China, the main indices were up by over 2%. The percentage of companies suspended from trading in China has now fallen to less than 20%, versus 50% at the height of the turmoil, signalling a sustained stabilisation in China’s stock market.
The Reserve Bank of New Zealand cut its official cash rate by 0.25% to 3% as expected. However, some were hoping that the central bank would have made a more aggressive move and cut by 50 basis points. This sent the kiwi higher against the dollar as it jumped to 0.6647 after the cut.
The Canadian dollar and the aussie stayed new six-year lows as weak commodity prices continued to weigh on the currencies. The greenback was steady at 1.3035 against the loonie, while the aussie edged lower slightly to 0.7369. Brent crude oil prices bounced back above $56 having dipped below it on data showing US crude inventories rose last week. Gold also came off earlier lows, rising to $1097.63 in late Asian session.
The pound rose to near Wednesday’s highs at 1.5624 after weakening against the dollar in yesterday’s US session. It also strengthened against the euro as the single currency fell to 0.6996. The Bank of England minutes on Wednesday showed that the MPC is concerned about rising wages, indicating that the hawks of the committee are likely to vote in favour for a rate rise in August and were only put off doing so in July because of the escalating Greek crisis.
Coming up later in the day, the main data to watch out for will be UK retail sales for June, which are expected to improve by 0.4% on the month. For the US, the weekly initial jobless claims will be in focus. Also to watch out for are Canadian May retail sales and Eurozone consumer confidence index for June.
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