Asian session: the yen declined

The yen declined against the majority of its 16 main counterparts after euro-area finance ministers agreed to extend the capacity of a rescue fund for indebted countries, curbing demand for haven assets.

Japan’s currency also weakened after Luxembourg Prime Minister Jean-Claude Juncker said yesterday the finance chiefs of the region’s 17 nations agreed to work on boosting the International Monetary Fund’s resources.

The Australian and New Zealand dollars touched the highest levels in more than a week as euro- area officials agreed to extend the capacity of the region’s bailout fund and leaders worked toward a Dec. 9 summit.

The so-called Aussie maintained four days of gains versus the yen as a government report showed business investment rose by more than economists forecast in the third quarter. New Zealand’s currency, nicknamed the kiwi, held a two-day advance against the greenback after a report showed home-building approvals rose in October for the third time in four months as the nation recovers from earthquakes on the South Island.

EUR/USD: on Asian session the pair fell.

GBP/USD: on Asian session the pair declined.

USD/JPY: on Asian session  the pair traded in range Y77.85-Y78.10.

European events for Wednesday start at 0700GMT with the German ILO measure of employment and also retail sales from Germany. This is followed by housing starts/permits and PPI data from France, while at 0855GMT we get the main labour market data from Germany. EMU data at 1000GMT includes the October unemployment rate and the November measure of flash HICP. US data starts at 1200GMT with the weekly MBA Mortgage Application Index, which is followed at 1230GMT by Challenger Layoffs data, at 1315GMT by the ADP National Employment Report and then at 1330GMT by the ISM-NY Business Index and third quarter productivity, which is expected to be revised down to a 2.6% rate of growth, as GDP was revised down. As a result, unit labor costs are expected to be revised up to a 2.2% rate of decline. US data continues at 1445GMT with the Chicago PMI, which is forecast to rise to a reading of 59.0 in November after falling slightly to 58.4 in October. The Chicago PMI is the one index that appears to consistently indicate expansion. NAR Pending Home Sales and the Help-wanted Online index follow at 1500GMT, while at 1530GMT the weekly EIA Crude Oil Stocks data is due. At 1545GMT, Philly Fed Pres Charles Plosser moderates a panel discussion at the San Francisco Fed's Asia Economic Policy Conference. Later data includes the 1900GMT release of the Fed's Beige Book and the 8GMT release of Agriculture Prices data.