European session: the euro fell

Data:

07:00 Switzerland Trade Balance December 3.00 2.85 2.00

09:30 United Kingdom PMI Construction January 53.2 53.0 51.4

10:00 Eurozone Producer Price Index, MoM December +0.2% -0.1% -0.2%

10:00 Eurozone Producer Price Index (YoY) December +5.3% +4.3% +4.3%

The euro weakened  as Greece struggled to reach an agreement with bondholders on cutting the nation’s debt burden, stoking concern Europe’s crisis will deepen.

The common currency fell  as Spanish bonds declined after the nation sold debt today.

The euro briefly erased losses after China’s Premier Wen Jiabao said his nation supports European efforts to stabilize the 17-nation currency.

Greece and its creditors are locked in talks over a debt- swap deal for the nation. Bondholders last week lowered their demands for an average coupon on the new debt they would get after European officials demanded they take steeper losses. The European Central Bank is likely to refuse to show its hand on how it will help cut Greece’s debt burden until the deal is reached, said economists from ING Group to Deutsche Bank.

EUR/USD: the pair fell below $1,3100.

GBP/USD: the pair decreased in $1,5810 area.

USD/JPY: movement of pair was limited Y76,05-Y76,18.

Challenger Layoffs starts UK data at 1230GMT, while at 1330GMT, the weekly jobless claims are expected to fall 7,000 to 370,000 in the January 28 week after see-sawing in recent weeks. The weekly Bloomberg Comfort Index is due at 1445GMT along with the ISM-New York Business Index. Weekly EIA Natural Gas Stocks data is due at 1530GMT. Late US data then sees the 2130GMT release of M2 Money Supply.