Forex: Wednesday’s review

The euro fell against most of its major peers amid concern that European Central Bank measures to support its banking sector won’t be enough to arrest region’s worsening sovereign-debt crisis.

The 17-nation currency erased an earlier advance as the ECB said it had awarded 489 billion euros ($637 billion) in 1,134- day loans to banks, more than the 293 billion euros forecast by economists, as investors bet the euro-region debt crisis is far from done. The euro-area economy will probably fail to grow next year after expanding 1.6 percent in 2011, while the U.S. is forecast to accelerate to 2.1 percent from 1.8 percent, according to Bloomberg surveys of economists.

The franc weakened 0.3 percent to 1.2222 per euro and 0.5 percent to 93.64 centimes per dollar.

Yields on Italian two-year notes rose as much as 27 basis points, or 0.27 percentage point, to 5.25 percent, snapping four-straight days of declining borrowing costs, while Spanish debt yields with the same maturity increased 27 basis points to 3.5 percent, after falling for eight days.

EUR/USD: yesterday the pair has grown on a figure, however fell later.

GBP/USD: yesterday the pair has grown, but have lost the won positions later.

USD/JPY: yesterday the pair advanced.

On Thursday UK data sees the third release of Q3 GDP data at 0930GMT along with Q3 Balance of Payments data where the Current Account Balance is expected at -stg6.3 billion. There is no major core-European data due on Thursday but at 1600GMT, the ESRB is due to hold a press conference, including Mario Draghi and Mervyn King as well as Andrea Enria.

US data starts at 1130GMT when initial jobless claims are expected to rise 14,000 to 380,000 in the December 17 employment survey week. US data at 1500GMT includes leading indicators, the FHFA Home Price Index and also BLS mass layoffs. This is followed at 1530GMT by the weekly EIA Natural Gas Stocks data. Later US data sees the 2000GMT release of Treasury Allotments by Class and the 2130GMT release of M2 money supply data.