The Euro climbed to $1.31 for the first time in almost three months as European confidence rose to its highest level in more than two years this month and German unemployment decreased. Europe’s shared currency was headed for a 7 percent monthly rally against the dollar and 5.3 percent gain versus the Japanese Yen. An index of consumer sentiment in the Euro nations increased this month to 101.3, the highest level since March 2008. The number of people out of work in Germany fell in July for a 13th month, dropping by a seasonably adjusted 20,000 to 3.21 million, the lowest since November 2008. The single currency was supported this week as stress tests released July 23 found only seven European Banks needed to raise additional capital. The European Union’s rescue fund for the Euro region is now authorized to sell debt after Italy’s parliament approved the backstop for the 16-nation economy. The vote by lawmakers in Rome yesterday means at least 90 percent of shareholders in the European Financial Stability Facility have completed legislative approval. The facility, which would sell bonds backed by guarantees and use the funds to loan to nations that are struggling to borrow, is the main part of a 750 billion Euro package designed to combat a sovereign-debt crisis triggered by Greece’s near default.
Canada’s dollar advanced against its U.S counterpart for the first time in three days on rising demand for oil, the nation’s largest export. Yields on benchmark 10-year Canadian government debt fell for a second day, declining 4 basis points to 3.19%. Canada’s dollar appreciated 0.3 percent to C$1.0359 per U.S. Dollar in late trading yesterday. Futures on crude oil gained, the first time in a week, by 1.4 percent to $78.03. A government report showed factory product prices dropped in June the most in more than a year, faster than a decline in raw-material costs. The industrial product price index fell 0.9 percent in June.
Today's Opening Rates (Mid-Rate) (as at 08:30 E.D.T.)
| EUR/USD | 1.3027 | USD/JPY | 86.47 | GBP/USD | 1.5610 | USD/CHF | 1.0396 |
| USD/CAD | 1.0323 | AUD/USD | .9009 | NZD/USD | .7233 | EUR/GBP | .8346 |
| USD/PLN | 3.0755 | USD/MXN | 12.722 | USD/DKK | 5.7191 | USD/SEK | 7.2339 |
Equity Indices (as at 08:30 E.D.T.)
| Dow Jones | 10,467 | FTSE | 5,277 | Nikkei | 9,537 |
| ISEQ | 2,897 | NASDAQ | 2,251 | |
Indicative Opening Deposit Rates
| Time Period |
$ Deposit |
Euro Deposit |
| 1 Week |
0.30 |
0.29 |
| 2 Week |
0.31 |
0.29 |
| 3 Week |
0.32 |
0.29 |
| 1 Month |
0.32 |
0.36 |
| 2 Month |
0.40 |
0.29 |
| 3 Month |
0.48 |
0.61 |
| 6 Month |
0.70 |
0.93 |
| 9 Month |
0.88 |
1.08 |
| 12 Month |
1.08 |
1.22 |
| |
undefined |
undefined |
FOCUS: E.U. STRESS TESTS
E.U. regulators scrutinized 91 of the bloc’s banks to assess whether they have enough capital to withstand a recession and sovereign-debt crisis, with a Tier 1 capital ratio of 6 percent as a floor. Seven European Union banks failed the region’s stress tests with a combined capital shortfall of 3.5 billion euros ($4.5 billion), according to the Committee of European Banking Supervisors, which coordinated the initiative. Governments are seeking to reassure investors about the health of financial institution after the debt crisis pummelled the bonds of Greece, Spain and Portugal. The evaluations took into account potential losses only on government bonds the banks trade, rather than those they are holding to maturity, according to CEBS. That means the tests are set to ignore the majority of bank’ holdings of sovereign debt, investors said.
Regulators tested portfolios of sovereign five-year bonds, assuming a loss of 23.1 percent on Greek debt, 12.3 percent on Spanish bonds, 14 percent on Portuguese bonds and 4.7 percent on German state debt, according to CEBS. The tests also assessed the impact of a four-step credit rating downgrade on securitized debt products, a 20 percent slump in European equities in both 2010 and 2011 and 50 other macroeconomic parameters, including a drop in the EU’s gross domestic product over two years.
