European session:

The euro fell against 11 of its 16 most traded counterparts as officials disagreed on how to quell the sovereign-debt crisis before next week’s summit of European Union leaders.
France yesterday backed Germany in refusing to add to the European Union’s 440 billion-euro ($581 billion) rescue fund and rejecting joint euro-area bonds.
German Chancellor Angela Merkel and French President Nicolas Sarkozy are due to hold talks in Germany today. With the euro region’s two biggest economies digging in over further measures to stem the debt crisis in Europe, EU leaders meeting next week may struggle to offer financial markets any respite.
European Central Bank Vice President Vitor Constancio late yesterday signaled European governments should be ready to increase the size and flexibility of their bailout fund as the ECB urges leaders to do more to fight the fiscal crisis.
Spanish and Italian government bonds fell, increasing the additional yield investors demand to hold the securities instead of benchmark German bunds, amid concern government borrowing costs will rise at debt sales next week.
The opposition is “going to probably scupper the e-bonds idea and would probably be taken quite negatively by the markets, so we could see the euro coming back under pressure,” said Ian Stannard, a senior currency strategist at BNP Paribas SA in London.
The Australian dollar is set for a weekly drop on concern Chinese inflation data tomorrow will back the case for the Asian nation to tighten monetary policy.

EUR/USD: traded within $1.3220/80. Offers: $1.3270, $1.3285/00, $1.3310/25. Bids: $1.3220, $1.3195/90, $1.3120

GBP/USD: retains an underlying buoyant tone, the corrective pullback off highs of $1.5863 found decent support at $1.5820 with rate moving into the US open around $1.5845. Next resistance seen at $1.5875 ahead of $1.5890/00. Support $1.5820 then $1.5800.

USD/JPY: Slipped to a low of Y83.45, but reported stops if triggered have been absorbed well, with market trading around Y83.50 ahead of the NY opening. Further bids are reported Y83.30/40 with stops seen down at Y83.00/15.

US data starts at 1330GMT with Trade and the Import, Export Price Index. The international trade gap is expected to hold steady at $44.0b billion in October after narrowing in September. Import prices rose 0.9% in October on a 3.3% rise in petroleum prices and a 0.4% combined gain in the other import categories. Boeing reported 108 orders in October, down slightly from 117 in September. At 1455GMT, the Michigan Sentiment index is expected to rise slightly to a reading of 72.2 in early-December from 71.6 in November. Late US data at 1900GMT sees the Treasury Statement, where Treasury is expected to post a $130.0 billion budget gap in November. The Treasury posted a $120.3 billion gap in November 2009.