European session:

Data:

09:30 UK Claimant count (October) 5.3K

09:30 UK Claimant count rate (October) 5.0%

09:30 UK Average earnings (3 months to September) Y/Y 2.3%

09:30 UK Average earnings ex bonuses (3 months to September) Y/Y 1.7%

09:30 UK ILO Jobless rate (September) 8.3%

10:00 EU(17) Harmonized CPI (October) final 0.3%

10:00 EU(17) Harmonized CPI (October) final Y/Y 3.0%

10:00 EU(17) Harmonized CPI ex EFAT (October) Y/Y 1.6%

10:30 UK BoE quarterly inflation report 

The euro fell against the dollar as European Commission President Jose Barroso said the region is facing a “truly systemic crisis.”

The euro pared declines from a five-year low after the European Central Bank was said to be buying Spanish and Italian government bonds, narrowing their yield gap over benchmark German bunds.

The pound fell for a third day against the dollar as U.K. unemployment increased and joblessness among young people climbed above 1 million for the first time since at least 1992.

The Dollar gained for a third day as European stocks fell, boosting demand for the U.S. currency as a haven.

The pound depreciated versus the dollar as the Bank of England said Britain faces a “markedly weaker” outlook for economic growth, signaling it may expand stimulus.

Growth may be “broadly flat” in the first half of 2012, central bank Governor Mervyn King said in a press conference after the quarterly Inflation Report.

The pound also fell after the Office for National Statistics said British unemployment rose the most since 2009, with the rate climbing to a 15-year high of 8.3 percent and joblessness among young people reached more than 1 million for the first time since at least 1992.

EUR/USD: the pair fell in $1.3430 area, later restored above $1,3550.

GBP/USD: the pair holds in $1.5740-$ 1,5810 area.

USD/JPY: the pair holds in Y76,90 area.