Forex: Monday’s review

The euro fell for the first time in three days against the dollar as European finance ministers attempt to meet a self-imposed deadline for funding from the International Monetary Fund to address the region’s debt crisis. The 17-nation European currency has depreciated 2.8 percent versus the dollar this year and 6.6 percent against the yen. After falling to its weakest level against the dollar since January, the euro is poised to depreciate further as measures in the derivatives market show traders expect the blueprint unveiled by European leaders this month for a closer fiscal accord will fail to stem the declines.

The dollar rose against the yen after North Korean said leader Kim Jong Il died, spurring concern instability may increase in Asia. Japan’s currency has advanced 4.6 percent in 2011 against nine developed-nation counterparts, according to Bloomberg Correlation-Weighted Indexes, as investors sought the safest investments amid Europe’s sovereign-debt crisis. The dollar is the next-best performer, strengthening 1.8 percent, while the euro has depreciated 1 percent. Kim died of exhaustion two days ago, the official Korean Central News Agency said. His death ended his 17-year rule.

The yen dropped against most of its major counterparts amid concern a destabilization of the Korean peninsula will dim the outlook for Japan’s economy and security.

EUR/USD: yesterday the pair fell.

GBP/USD: yesterday the pair dropped.

USD/JPY: yesterday the pair rose

On Tuesday European data starts at 0700GMT with German PPI data for November, closely followed by the German GfK consumer sentiment data at 0710GMT. Also today, MEPs are due to discuss the new fiscal compact. The exact time and location is to be confirmed, but this will likely take place late in the European morning. Core-European data is due at 0900GMT, when the German IFO business survey is due and is expected to show slight deteriorations in the Business Climate index to 106, in the Current Assessment to 116 and in Expectations to 97. At 1500GMT, the pace of us housing starts is expected to rise slightly to a 630,000 annual rate in November, offsetting the decline in the previous month. At 1530GMT, the weekly EIA crude oil stocks data is due.