RTTNews - The euro saw mixed results against other majors on Tuesday in New York as traders showed uncertainty ahead of the U.S. interest rate decision tomorrow.
The common currency rebounded modestly against the dollar after hitting a near-term low yesterday. Meanwhile, the European currency backed off of recent highs against the sterling and yen as lower global stocks led to weaker risk appeal.
The Federal Open Market Committee's two-day meeting begins today, with the rate decision expected to be revealed Wednesday. The central bank is widely expected to keep the fed funds futures rate unchanged.
Tuesday, Andreas Schmitz President of the Federal Association of German Bank said in an interview to the Financial Times that Germany still remains at the risk of a credit crunch. He said there is a real danger of a credit crunch in the largest Eurozone economy.
The euro climbed above 1.4150 against the dollar, about a half-cent better than the 11-day low reached yesterday. The European currency had been trending lower since hitting a multi-month high of 1.4446 last week.
The European currency turned lower against the sterling, moving near 0.8580. The euro had hit a 13-day high of 0.8615 earlier in the morning.
UK's house purchase loans increased 23% month-on-month to 45,000 in June from 36,500 loans in May, the Council of Mortgage Lenders said on Tuesday. But, the number was 6% lower than the same month last year.
The euro fell to an eight-day low against the yen of 135.24. The common currency had reached a two-month high of 138.71 yesterday.
Tuesday, Bank of Japan Governor Masaaki Shirakawa said he do not see a risk of a deflationary spiral now. But, this warrants close and careful monitoring of trends.
In economic news from the Eurozone, Germany's wholesale price index dropped 10.6% year-over-year in July, compared with a 8.8% decline in the previous month, the Federal Statistical Office said. This was the highest price decline since the beginning of the index calculation in 1968. Economists were looking for a decline of 9.7%.
On a monthly basis, wholesale prices fell 0.5% in July, in contrast to the 0.9% increase in the preceding month. Economists had expected an increase of 0.3%.
Germany's Federal Statistical Office also reported that the consumer price index or CPI dropped 0.5% year-over-year in July, in contrast to the 0.1% increase in the preceding month. The consumer price index in July was revised up from 0.6% fall estimated in the preliminary report.
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