Although weekend's verbal assurance from G7 finance ministers that Greece's fiscal problem will be dealt helped euro to stage a brief rebound to 1.3718 against the greenback in NZ/AUS trading, subsequent renewed selling interest pressured the pair to an intra-day low of 1.3621 in Asia. However, as German Finance Minister Wolfgang Schaeuble has expressed a degree of confidence on Greece's problems and European Central Bank Governing Council member Ewald Nowotny was quoted in newspaper Wiener Zeitung that eurozone countries should not issue joint bonds as a way to allow less solvent countries to raise debt at the expense of others, the single currency rebounded briefly in European morning before retreating on cross-inspired selling in euro and closing at 1.3650(eur/jpy declined from intra-day high of 122.78 to 121.55 and ended up at 121.84).
The British pound tumbled to 8-1/2 month low of 1.5535 versus the dollar as broad concerns about sovereign debt highlighted Britain's own grim fiscal position and an ICM Ltd. survey for the Sunday Telegraph newspaper showed the U.K. opposition Conservative party’s lead over Prime Minister Gordan Brown’s Labour party narrowed to nine points, suggesting the election that must be held by June will fail to produce a clear winner. Although short-covering lifted the price in Europe, sterling fell against U.S. currency in N.Y afternoon as DJI moved from positive to negative territory and ended the day down 103 points to 9908.
The Japanese yen traded inside a narrow range of 89.15-89.57 versus the greenback throughout the day as higher risk appetite lowered the demand for the safe-haven currency.
Economic data to be released on Tuesday include Japan machine tools orders, Germany current account, CPI final, HICP final, trade balance, U.K. trade balance, BRC retail sales, RICS house price balance and U.S. wholesale inventories.