European session: The euro rose

Data:

08:50 France PMI services (November) 49.6

08:55 Germany PMI services (November) seasonally adjusted 50.3

09:00 EU(17) PMI services (November) 47.5

09:30 UK CIPS services index (November) 52.1

10:00 EU(17) Retail sales (October)adjusted 0.4%

10:00 EU(17) Retail sales (October) adjusted Y/Y -0.4%

The euro advanced as Italy’s cabinet approved a plan to cut its deficit before a European summit on the region’s sovereign debt crisis.

Italian Prime Minister Mario Monti announced 30 billion euros of austerity and growth measures yesterday. The premier will present the package, which includes a tax on luxury goods, resurrects a property levy on first homes, and forces many workers to delay retirement. The proposal will go before both houses of parliament today.

The euro appreciated after people familiar with the negotiations said a proposal to channel European Central Bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($269 billion) to fight the crisis.

The yen and dollar weakened as European stocks gained, damping demand for safer investments.

The ECB will cut its benchmark interest rate to 1 percent from 1.25 percent when it meets Dec. 8, according to the median estimate of economists.

EUR/USD: the pair has grown, showed  high in $1,3460 area.

GBP/USD: the pair has lead the most part of the european session in $1.5620-$ 1,5660 area.

USD/JPY: the pair was in Y77.90-Y78.10 area.

US data starts at 1430GMT with the weekly MNI Capital Goods Index. This is followed at 1500GMT by both the ISM data and Factory Orders as well as the latest Employment Trends Index.