The greenback gained against most of its major counterparts except the yen as global stocks slid after China’s premier rebuffed calls for the renminbi to appreciate. The euro dropped against most currencies as officials from the EU damped speculation a meeting this week will produce a rescue strategy amid hopes Greece’s budget cuts will make a bailout unnecessary.
Irish Times on Sunday carried a comment by EU spokesman saying euro zone has not agreed a financial support package for Greece pressured euro early on. The news along with ongoing speculation that China is close to tighten its monetary policy has pushed the single currency down to 1.3726 in Asia before staging a minor bounce. Later in Europe a German government spokesman said no political decision to be made on Monday on euro zone aid for Greece. A lack of progress on a financial aid package for Greece has triggered renewed selling interest on euro and price fell sharply lower to 1.3639 in NY mid-day before rebounding on profit-taking.
A virtually standstill house price data came out from U.K early in Asian morning. The 0.1% increase in Rightmove house prices m/m in March was the slowest growth ever recorded and this supported recent data from Halifax and Nationwide showing that UK housing market is entering a tough period. Despite the disappointing housing data, the sterling rose briefly to a high of 1.5218 on Moody's comment that Britain wound retain its AAA rating. However, price retreated sharply in tandem with euro afterwards on broad-based USD strength and also cross selling in sterling. Cable tumbled to an intra-day low of 1.5019 in NY mid-day before stabilizing.
The Federal Reserve is due to announce an interest rate decision on Tuesday 18:15GMT, most economists forecasting policy makers will keep the benchmark interest rate unchanged at a record-low range of zero to 0.25.
Economic data to be released on Tuesday include Australia RBA release minutes, Japan monetary policy meeting, machine tools orders, U.K. DCLG house prices, EU HICP final, ZEW survey, U.S. Building permits, housing starts, import and FOMC rate announcement.