The dollar was headed for its biggest weekly drop against the euro on speculation the Federal Reserve will delay increasing interest rates to protect the U.S. economy.
The dollar dropped as the price of crude oil reached a record high of more than $142 per barrel
Today's US data was mixed. Personal income for May came in at 1.9% month-over-month, well above the 0.4% economists forecast and also above the previous month's 0.3%. Personal spending also exceeded expectations, up 0.8% month-over-month in May. The May PCE deflator came in at 3.1% year-over-year, which is slightly below expectations. Core PCE came in at 0.1% month-over-month, which is also slightly below expectations for May. Year-over-year, core PCE came in at 2.1%. But, the University of Michigan consumer confidence survey came in at 56.4, which is a bit below expectations and last month's reading, marking a new multiyear low.
The yen rebounded from a record low against the euro and rose versus the dollar as a decline in stock markets around the world reduced demand for higher- yielding assets funded in Japan.

Will stick to my last analysis of the European economy.
Trichet calls for responsibility by oil producers, consumers.
Says oil mkts should be as transparent as possible.
We encourage Chinese authorities on FX flexibility

The S&P 500 has made its way back to the unchanged mark in choppy fashion. Its counterparts, however, are still in the red.
Forestry and wood product company Weyerhauser (WY 50.27, +0.08) announced it will incur pretax charges ranging from $300 million to $325 million related to lowered real estate prices or impairments.
Energy, healthcare, and materials are the only three sectors sporting a gain this session. All three sectors have advanced 1.0% or more.

Aug contract holds at $139.90, up $0.26 on the day but well below the $142.26 record high notched earlier in the day.

The stock market has moved upward toward the unchanged mark. Still, seven of the ten economic sectors are in the red. Decliners on the NYSE outnumber advancers by nearly 2-to-1.
A couple players in the telecom arena were given uninspiring marks by analysts at Credit Suisse. Credit Suisse downtraded shares of handset maker Nokia (NOK 24.32, -0.74) to Neutral from Outperform. The firm also initiated coverage of Motorola (MOT 7.22, -0.08) with an Under Perform grade.

Holds the Y106.20 level in current trading and remains close to morning lows which traders are calling Y106.06 despite one-off prints below there to Y106.01. Flows light, residual bids remain in place to Y106.00 and pair seeing only slight pressure despite slippage in US stocks.

Stocks have pared some of their early gains. The Dow Jones Industrials Average and the Nasdaq have fallen back into negative ground.
Energy (+1.3%) is showing strength in the early going. Providing leadership to the sector are players in the exploration and production industry (+1.8%). The sector and its industry component are up as oil continues to trade with gains. Crude prices are currently indicated near $140.50 per barrel.
Treasuries are attracting modest attention. The 10-year Note is up 10 ticks and yielding 3.99%, which is its lowest in 10 days.

The stock market has made its way out of the red and is now sporting a decent gain. Its counterparts have also moved out of negative ground, but flutter along the unchanged mark.
The University of Michigan consumer confidence survey came in at 56.4, which is a bit below expectations and last month's reading, marking a new multiyear low.
Oil prices continue to weigh on investors' minds as crude prices stretch higher and hit new intraday records. Oil is currently trading hands at $140.80 per barrel.

EUR/USD $1.5550
USD/JPY Y106.00, Y107.75
AUD/USD $0.9575
USD/CAD C$1.0130

Stocks are on track for a mixed opening, according to futures (S&P futures +1.1, Nasdaq futures -5.8). Bank of America is planning to slash its employee headcount after it closes its acquisition of Countrywide Financial . The layoffs are expected to take place over a couple years.
Personal income for May came in at 1.9%, well above the 0.4% economists forecast and also above the previous month's 0.3%. Personal spending also exceeded expectations, up 0.8% in May. The MayPCE deflator came in at 3.1%, which is slightly below expectations. Core PCE came in at 0.1%, which is also slightly below expectations for May. New reports are indicating Merrill Lynch may incur additional write-downs in the second quarter. On the earnings front,Accenture topped analysts' estimates for the most recent quarter and provided upside guidance for its fourth fiscal quarter. Accenture also raised its full-year outlook. KB Home reported a loss for its second quarter that was worse than analysts anticipated.
Anheuser-Busch has officially rejected InBev's unsolicited takeover bid on grounds that the offer is inadequate and is not in the best interest of shareholders.

The yen rebounded from a record low against the euro and rose versus the dollar as a decline in stock markets around the world reduced demand for higher- yielding assets funded in Japan.
The yen also erased a weekly decline against the euro after European Central Bank council member Miguel Angel Fernandez Ordonez said an interest-rate increase next month ``is not certain'' and the European Commission said confidence among European executives and consumers dropped this month. The Swiss franc headed for weekly gains against the dollar and euro. The U.K. pound dropped against the dollar after the economy grew less than previously estimated in the first quarter.
``We're finally seeing some catch-up in terms of the rising risk aversion in other markets feeding into currencies,'' said Adam Cole, global head of currency strategy in London at Royal Bank of Canada, the nation's largest lender. ``That's leading to strengthening in the safe-haven currencies and the yen has been the main beneficiary so far.''

EUR/USD: posted low around $1.5624 before bounsed back to $1.5680. Offers $1.5790/1.5800, $1.5820/25, $1.5840/50, bids $1.5720/10
GBP/USD: got support at $1.9800 in the wake of GDP revision and reached $1.9900 ahead of American session start.
USD/JPY:due to carry trades reduction and general US dollar pressure fell under yesterday's Y106.60 low, also taking out four-month trendline support at Y106.47 and triggering further stops en-route to Y106.10, with the rate holding just off the base ahead of the American open.

"This (380k) level of claims is consistent with a weakening labor market. We expect non-farm payrolls to fall 50,000 in June while the unemployment rate only slips a tenth to 5.4%."

"The data (industrial orders) is likely to reinforce the ECB's belief that the euro zone's economy is fundamentally sound and that it can press ahead with raising its key interest rate from 4 percent to 4.25 percent at its 3 July meeting to try to ensure that current elevated inflationary levels and pressures are not sustained over the medium term."

EUR/USD $1.5550
USD/JPY Y106.00, Y107.75
AUD/USD $0.9575
USD/CAD C$1.0130

The yen rebounded from a record low against the euro and rose versus the dollar as a decline in stock markets around the world reduced demand for higher- yielding assets funded in Japan.
The yen also erased a weekly decline against the euro after European Central Bank council member Miguel Angel Fernandez Ordonez said an interest-rate increase next month ``is not certain'' and the European Commission said confidence among European executives and consumers dropped this month. The Swiss franc headed for weekly gains against the dollar and euro. The U.K. pound dropped against the dollar after the economy grew less than previously estimated in the first quarter.
``We're finally seeing some catch-up in terms of the rising risk aversion in other markets feeding into currencies,'' said Adam Cole, global head of currency strategy in London at Royal Bank of Canada, the nation's largest lender. ``That's leading to strengthening in the safe-haven currencies and the yen has been the main beneficiary so far.''

Resistance 3: Y108.60
Resistance 2: Y108.40
Resistance 1: Y107.20
Current price: Y106.35
Support 1: Y106.20
Support 2: Y105.50
Support 3: Y103.80

Comments: Above Y107.20 resistance comes at yesterday's peak of Y108.20. Rise above may extend Y108.50/60. Below Y106.20, support is around Y105.80. Lower correction may extend to Y103.80.

Resistance 3: Chf1.0430
Resistance 2: Chf1.0350
Resistance 1: Chf1.0300
Current price: Chf1.0198
Support 1: Chf1.0160
Support 2: Chf1.0050
Support 3: Chf0.9950

Comments: The nearest support at today's lows Chf1.0160/50. Further down support comes at Chf1.0050.
Resistance comes at former support around Chf1.0280/00, break above to open a way to Chf1.0350. Further level comes on Chf1.0430.

Resistance 3: $2.0020
Resistance 2: $1.9960
Resistance 1: $1.9900
Current price: $1.9865
Support 1: $1.9800
Support 2: $1.9660
Support 3: $1.9580

Comments: The pare retains positive mood and trades near resistance spotted at $1.9890/00 (upper bound of the rising channel since June 13). Further on the road lies $1.9950/60 zone, with a break above the latter level to open the way for a test of $2.0000/20 area. The nearest support is $1.9800 (50% of the resent rally). A break under will open the way to $1.9670/60 (June 25 low) and Monday low at $1.9580.

Resistance 3:$1.5900

Resistance 2: $1.5820
Resistance 1: $1.5780
Current price: $1.5762
Support 1: $1.5630
Support 2: $1.5540
Support 3: $1.5460

Comments: The nearest resistance comes at $1.5780, then – at June highs $1.5820/40. Stronger level is around $1.5900. The closest support at $1.5630. The stronger one comes at on $1.5540 with a break under will open the way to $1.5460 (this week low).

EUR
Bids: $1.5720, $1.5690/80
Offers: $1.5790, $1.5800 и $1.5850.
GBP
Bids: $1.9850, more at $1.9810/00
Offers: $1.9900/10, $1.9925/35, $1.9950/65 и $2.0000

Stops triggered on the break, with this month's lows now under threat at Chf1.0150.

The FTSE was last down 0.5%, with the DAX down 0.3% and the CAC 1.07%.

Industry confidence in June dropped to -5 from -2 in May, while consumer confidence saw a further drop to -17 after falling to -15 in
the previous month.
-- The European Commission's Business Climate Indicator decelerated in June to +0.14 from +0.58 in May.

--Q1 services output revised down to +0.3% q/q; +2.6% y/y
--Q1 household spending revised down to +1.1% q/q; +3% y/y

Shanghai Compositebenchmark lost 153.4 points, or 5.29%, at 2748.43 - a fresh 16-month closing low. The index was down over 6% just ahead of the close.

-- The seasonally adjusted goods trade balance improved in April to a surplus of E5.9 billion after -E2.9 bln in March (revised from -E3.9 bln).
-- On an unadjusted basis, current account posted a deficit of E9.2 billion in April after -E5.7 bln in March (revised from -E7.8 bln).

The Nikkei ended 277.96 points, or 2.01%, lower at 13544.36. The broader-based TOPIX was down 24.11 points at 1320.68.

- Record oil price bad for inflation, growth
- Oil prices make life very difficult for central banks
- Latest eurozone PMI data were disappointing
- Asked if July hike is certain, said nothing is inevitable.

- 4Q GDP revised to +0.3% q/q vs +0.3%
- 1Q private consumption revised to flat q/q vs +0.1%
- 1Q total investment revised to +0.8% q/q vs +1.1%

Resistance 3: Y108.60
Resistance 2: Y108.40
Resistance 1: Y107.20
Current price: Y106.90
Support 1: Y106.60
Support 2: Y106.40
Support 3: Y106.20

Comments: Above Y107.20 resistance comes at yesterday's peak of Y108.20. Rise above may extend Y108.50/60. Below Y106.60, support is around Y106.40. Below correction may reach Y106.20.

MAY PPI EX-ENERGY/AG +0.3% M/M, +2.1% Y/Y; APRIL +0.4%
MAY ENERGY PPI +5.1% M/M, +20.0% Y/Y; AGRI: +0.4%/+9.3%

Resistance 3: Chf1.0430
Resistance 2: Chf1.0350
Resistance 1: Chf1.0300
Current price: Chf1.0236
Support 1: Chf1.0220
Support 2: Chf1.0150
Support 3: Chf0.0050

Comments: The nearest support at today's lows Chf1.0220, than comes Chf1.0160/50. Resistance comes at аfomes support around Chf1.0280/00, break above to open a way to Chf1.0350. Further level comes on Chf1.0430.

FTSE down 23, the DAX down 43, the CAC down 46 and the Eurostoxx 50 down 40.

Resistance 3: $2.0020
Resistance 2: $1.9960
Resistance 1: $1.9900
Current price: $1.9865
Support 1: $1.9800
Support 2: $1.9660
Support 3: $1.9580


Comments: cable posted serious gains. The pare retains positive mood and trades near resistance spotted at $1.9890/00 (upper bound of the rising channel since June 13). Further on the road lies $1.9950/60 zone, with a break above the latter level to open the way for a test of $2.0000/20 area. The nearest support is $1.9800 (50% of the resent rally). A break under will open the way to $1.9670/60 (June 25 low) and Monday low at $1.9580.

Resistance 3:$1.5900
Resistance 2: $1.5820
Resistance 1: $1.5760
Current price: $1.5730
Support 1: $1.5630
Support 2: $1.5540
Support 3: $1.5460

Comments: The nearest resistance comes at $1.5760, then – at June highs $1.5820/40. Stronger level is around $1.5900. The closest support at $1.5630. The stronger one comes at on $1.5540 with a break under will open the way to $1.5460 (this week low).

The front-month Nymex WTI Aug '08 contract was last 64 cents lower at $139.00, having touched a low at $138.61.

High Low Close
EUR/USD 1.5764 1.5624 1.5750
USD/JPY 108.18 106.61 106.85
GBP/USD 1.9893 1.9712 1.9885
USD/CHF 1.0391 1.0218 1.0239

EUR/JPY 169.42 167.98 168.30
EUR/GBP 0.7948 0.7908 0.7918
GBP/JPY 213.89 211.91 212.48
GBP/CHF 2.0495 2.0311 2.0364


Change % Change Last
Nikkei 225 -7.60 -0.05% 13,822.32
Topix -1.29 -0.1% 1,344.79
DAX 30 -158.24 -2.39% 6,459.60
САС 40 -110.10 -2.43% 4,426.19
FTSE -147.90 -2.61% 5,518.20
Dow -358.41 -3.03% 11,453.42
Nasdaq -79.89 -3.33% 2,321.37
S&P -38.82 -2.94% 1,283.15
10yr Note 0.8200 -0.199% 4.033%
OIL NYMEX +5.09 +3.78% 139.64
Gold +32.80 +3.72% 915.10

06:35 France GDP (Q1) revised 0.6% 0.6%
06:35 France GDP (Q1) revised Y/Y 2.2% 2.2%
06:45 France PPI (May) - 0.7%
06:45 France PPI (May) Y/Y - 5.4%
08:00 EU(15) Current account (April) adjusted, bln - -15.3
08:00 EU(15) Current account (April) unadjusted, bln - -7.8
08:30 UK GDP (Q1) final 0.4% 0.4%
08:30 UK GDP (Q1) final Y/Y 2.5% 2.5%
08:30 UK Current account (Q1), bln - -8.5
09:00 EU(15) Economic sentiment index (June) - 97.1
09:00 EU(15) Business climate indicator (June) - 0.54
12:30 USA Personal income (May) 0.4% 0.2%
12:30 USA Personal spending (May) 0.7% 0.2%
12:30 USA PCE price index ex food, energy (May) 0.2% 0.1%
12:30 USA PCE price index ex food, energy (May) Y/Y - 2.1%
12:55 Germany CPI (June) preliminary 0.3% 0.6%
12:55 Germany CPI (June) preliminary Y/Y 3.3% 3.0%
12:55 Germany HICP (June) preliminary Y/Y 3.3% 3.1%
14:00 USA Michigan sentiment index (June) final 56.7 56.7