Asian session: the euro dropped to a one-week low

01:30 China CPI y/y November +5.5% +4.6% +4.2%

01:30 China PPI y/y November +5.0% +3.3% +2.7%

02:00 China Industrial Production y/y November +13.2% +12.8% +12.4%

The euro dropped to a one-week low against the dollar after a summit of European Union leaders failed to forge a unanimous accord, damping prospects for a rapid resolution to the region’s debt crisis. The euro was poised for weekly losses versus the yen and the greenback as French President Nicolas Sarkozy said British Prime Minister David Cameron made “unacceptable” demands regarding treaty amendments.

Leaders agreed to channel as much as 200 billion euros ($266 billion) to the International Monetary Fund and bowed to European Central Bank demands for a tightening of anti-deficit rules. They accelerated the startup of a planned 500 billion- euro rescue fund and scaled back bondholder loss-sharing provisions. Declines in the euro were trimmed as ECB President Mario Draghi called the decisions “a very good outcome for euro-area members,” after 12 hours of talks in Brussels.

Germany and France risk losing their AAA credit ratings in a review of 15 euro nations, Standard & Poor’s said

The yen and dollar climbed against a majority of their most-traded counterparts as Chinese stocks slid after the nation’s statistics bureau said industrial output rose 12.4 percent in November from a year earlier, the slowest pace since August 2009. Consumer prices climbed 4.2 percent from a year earlier, lower than all estimates in a Bloomberg News survey of 35 economists that had a median forecast of 4.5 percent.

EUR/USD: on Asian session the pair fell.

GBP/USD: on Asian session the pair dropped.

USD/JPY: on Asian session  the pair fell.

On Friday the European Summit of EU heads of state and government restarts around 0900GMT this morning in Brussels, although this will be the focus for the whole session, as the overnight headlines are padded out. Early European data from Germany at 0700GMT includes final HICP, Q3 Labor costs data and also the trade balance for October. France data at 0745GMT includes industrial output and also government deficit data for October.The UK data schedule is busy at 0930GMT with BOE Quoted Rates as well as the Producer Price Index, the Trade Balance Report and Construction Output.