The US dollar traded flat against most major currencies and fell vs. the yen following a report showing lower-than-expected job growth in the US. The ADP Employer Services reported 13,000 jobs were added in June, which was much lower than the forecasted 60,000 jobs. Additionally, the Institute for Supply Management of Chicago released a Purchasing Management Index (PMI) of 59.1 for June, which is better than the forecasted 59.0 however, a drop from 59.7 in May.

The euro recovered from its previous dip after the European Central Bank lent out less funds than expected in a recent loan program. The ECB lent banks 131.9 billion euros in a recent three-month funding program aimed to boost lending. The recent loans were closely observed as it gauged how reliant the European banks were in repaying the 442 million euros  maturing this Thursday.

The sterling traded flat against the dollar and slipped against the euro after ECB's smaller-than-expected loans eased some concerns about the finances of Eurozone banks. Domestically, the Nationwide building society reported house prices rose only 0.1% in June, a drop from the 0.5% rise in May. Economists believe Britain's housing market will cool-down on the second half of the year as the nation struggles to recover from recession.

The Canadian dollar waned down against the US dollar after domestic retail sales data unexpectedly weakened. Statistics Canada reported retail sales dropped to -2.0% in April vs. the previous +2.0%. Additionally, the nation's real GDP disappointed market expectations by reporting zero gains in the month after seven consecutive months of growth.

The Japanese yen strengthened against the dollar after data showed fewer US private sector jobs were added in June. Domestically, Japan's Manufacturing PMI reported a decrease to 53.9 in June, from the previous 54.7 in May. Housing starts in Japan came in less-than-expected at -4.6, vs. the forecasted +5.0%.

The Australian and New Zealand dollars slid near two-week lows vs. the US dollar as investors lean towards safe-haven currencies. Investors fear a shortfall in liquidity as European banks face a repayment of a near half trillion euros to the ECB on Thursday.

 

Indicative rates:

EUR/USD

1.2325

USD/JPY

88.20

GBP/USD

1.4983

USD/CAD

1.0575

USD/MXN

12.8281

USD/CHF

1.0738

AUD/USD

0.8511

NZD/USD

0.6931

10-Year Treasury Note Yield:  2.981%

Dow Jones Industrial Average:  9,900.16 +0.30%

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.