FOREX: Thursday's review

Data released:
10:00     UK     CBI retail sales volume balance (August)    -14%    -10%    -5%
12:30     USA     Jobless claims (week to 20.08)    417K    416K    412 (408)K
20:30     USA     M2 money supply (15.08), bln    +5.1    -    +43.1
23:30     Japan     Nationwide CPI (July)    0.0%    -    -0.1%
23:30     Japan     Nationwide CPI (July) Y/Y    0.2%    -    0.2%
23:30     Japan     Nationwide CPI ex fresh food (July) Y/Y    0.1%    0.0%    0.4%
23:30     Japan     Tokyo-area CPI (August)    0.1%    -    0.0%
23:30     Japan     Tokyo-area CPI (August) Y/Y    -0.2%    -    0.5%
23:30     Japan     Tokyo-area CPI ex fresh food (August) Y/Y    -0.2%    -0.2%    0.4%

The euro weakened against the dollar and pared gains versus the yen on concern regulators will need to extend a ban on short-selling in European equity markets to prevent the region’s sovereign-debt crisis from worsening.
Better-than expected durable-goods orders and home-price data from the U.S. curbed speculation Fed Chairman Ben S. Bernanke will announce a third round of bond purchases that boost the supply of dollars, known as quantitative easing, when he speaks tomorrow at a symposium at Jackson Hole, Wyoming.
“Expectations for QE3 have been pared down because the recent economic data isn’t conclusive” enough to warrant urgent action, said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. The dollar’s strength “is consistent” with those expectations, he said.
U.S. house prices rose 0.9% in June from the month before, the biggest increase since September 2005, a report showed yesterday. Durable-goods orders jumped 4% in July from a year earlier, following a revised 1.3% contraction the previous month.
The pound fell to the lowest level in more than two weeks against the euro as a report showed U.K. consumer confidence dropped in July, fueling concern the economic recovery will falter.
Sterling reached its lowest against the dollar since Aug. 17. Nationwide Building Society said its index of sentiment declined 2 points to 49 from June, the lowest reading since April. A gauge of consumers’ expectations for the economy in the next six months slipped 3 points to 67, the customer-owned lender said in an e-mailed report today. The pound declined as stock-market gains across Europe sapped demand for the nation’s bonds as a haven from the euro area’s debt crisis.

All week, markets have been waiting for Fed Chairman Ben Bernanke's speech at the annual Jackson Hole forum. The wait is over at 1400GMT. Ahead of then, at 0600GMT, Germany releases import prices for July, which are expected to come in unchanged m/m, 6.4% y/y. Also at 0600GMT, the France manufacturing investment survey is due, followed at 0800GMT by M3 data from the ECB, which is expected to come in at 2.2% with M3 lending at 2.5%. UK data sees the second estimate of Q2 GDP along with the June Index of Services data at 0830GMT. The risks are of a small downward revision to Q2 GDP, with final industrial production coming in weaker than expected, although the median forecast is for growth to remain at 0.2% q/q, 0.7% y/y.