European session:

The euro fell, snapping a two-day advance against the dollar, as European Union officials struggled to break a deadlock on a second Greek rescue plan.
“There’s still a lot of uncertainty about how the Greek debt issue will be resolved, and that’s putting some pressure on the euro,” said Lutz Karpowitz, a currency strategist at Commerzbank AG in Frankfurt. “The main problem is how to involve the private bondholders in a new rescue package. We’re still pretty confident a solution will be found and once that happens, it should be positive for the euro.”
EU finance ministers yesterday agreed to convene again on June 19 after they failed to reconcile a German-led push for bondholders to share part of the cost of a new Greek aid plan. European Central Bank warnings were backed by France that the move might constitute the region’s first sovereign default.
“There are still worries over Greece, given uncertainty about how it can avoid a credit event such as a default,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “Financial damage could be widespread. It’s a reason to sell the euro.”
ECB policy makers have warned against German proposals for extending Greek bond maturities for seven years, which rating companies have said would be considered a default. ECB President Jean-Claude Trichet, who attended yesterday’s meeting, said on June 9 that governments were flirting with what may be an “enormous mistake.”
Australia’s dollar was the best performer versus the shared European currency after central bank Governor Glenn Stevens reiterated that policy makers will need to raise interest rates at some stage. Demand for the greenback may be capped by estimates that U.S. reports today will show inflation slowed and homebuilder confidence stayed weak. The pound advanced versus the euro as data showed U.K. consumer confidence surged.

US data starts at 1230GMT with the May Consumer Price Index and the June NY Fed Empire State Survey. Consumer prices are expected to reflect the continued price pressures from food and energy, though to a lesser extent than in at the wholesale level. Overall CPI is forecast to hold steady in May, while core CPI is expected to rise 0.1%. At the same time, the NY Fed Empire State Index is expected to rise to a reading of 14.0 in June after falling in May. The US Treasury International Capital System (TICS) data is due at 1300GMT, shortly followed at 1315GMT by industrial production, which is expected to rise 0.2% in May after a flat reading in April that resulted from a shortage of motor vehicle parts from Japan. US data then continues with the weekly EIA Crude Oil Stocks data at 1430GMT.