The US dollar gained on the euro and fell against the yen as investors fled for safety amid continued concerns about fiscal recovery in the Eurozone and after a report showed soft US economic growth data. The Commerce Department reported gross domestic product expanded at 2.7% annual rate instead of the estimated 3% pace it reported last month. Additionally, the US Conference Board's consumer confidence index declined to 62.5 in June from 63.3 in the previous month. Current US economic reports have suggested the domestic recovery has lost its momentum in the second quarter, with continued high unemployment, decreased home building and purchasing, and reduced spending.

The euro weakened further against the dollar ahead of maturing European bank notes next week. Investors are concerned that banks may face difficulty funding 442 billion euros back to the European Central Bank next week. Additionally, a Bloomberg survey released a monthly index of executive and consumer sentiment in the 16 euro nations dropped to 98.3 in June from 98.4 in the previous month. Ongoing concerns about the Eurozone and weaker-than-expected US growth data reduced investor's tolerance for riskier currencies.

The British pound recovered from overnight losses after it gained approvals from credit rating companies this week. Fitch Ratings reported the UK's new budget proposal ambitious and assured it would keep its AAA credit rating, while Moody's Investors Services said the budget was supportive of the holding a top credit level. Endorsements from major credit agencies supported investor's sentiments for a nation's assets. UK Prime Minister David Cameron's controversial budget plan will be the dominating topic in a G-20 summit assembly later today.

The Canadian dollar rose against the US dollar as key Canadian exports show steady increases. In support for the loonie were higher crude oil prices and firmer bullion prices. Weak to unchanging data from Canadian retail sales and the consumer price index earlier this week suggests the currency has been driven by economic conditions abroad and crude oil price adjustments.

The Japanese yen strengthened against most major currencies as the staggering pace of global recovery increased risk aversion. In domestic reports, the overall nation's consumer price index increased to -0.9% in June from its previous month of -1.2%.

The Australian and New Zealand dollars weakened vs. the US dollar after weaker than expected data from the US. The consumer index suggests that global financial conditions have failed to gain support for riskier investments. With risk aversion brought back to the forefront, the Aussie and the kiwi came back under pressure.

Indicative rates:

EUR/USD

1.2364

USD/JPY

89.04

GBP/USD

1.5021

USD/CAD

1.0331

USD/MXN

12.6870

USD/CHF

1.0909

AUD/USD

0.8721

NZD/USD

0.7135

10-Year Treasury Note Yield:  3.090%

Dow Jones Industrial Average:  10,125.97 -0.23%

This market summary is prepared by Union Bank's Global FX Department for the general information of its customers. It is based on the most accurate information currently available, but should not be considered investment advice or a guarantee of future exchange rates or trends.