Forex: Wednesday’s review

Yesterday the euro declined after reaching a two-month high versus the yen as Greek Finance Minister Evangelos Venizelos accused some euro-area nations of wanting the Greece to leave the union. The 17-nation currency fell against the dollar after European policy makers delayed a decision on the nation’s bailout scheduled for today. The euro earlier advanced after China said it will help tackle Europe’s debt crisis. Venizelos leveled the accusation after a decision slated for tonight on aid totaling 130 billion euros ($170 billion) was postponed until Feb. 20 at the earliest. China will invest in Europe’s bailout funds and maintain its holdings of the region’s assets, central bank Governor Zhou Xiaochuan said today in Beijing. With the world’s largest foreign-exchange reserves of $3.18 trillion, the Asian nation has previously signaled it wants to diversify the holdings away from dollar-denominated assets.

The dollar remained lower against its higher-yielding counterparts as manufacturing in the New York region expanded in February at the fastest pace since June 2010.

EUR/USD: yesterday the pair fell and fixed below $1.3100..

GBP/USD: yesterday the pair was in consolidation.

USD/JPY: yesterday the pair decreased, but remained above Y78.00.

A heavy US calendar starts at 1330GMT, with the release of Producer Price data, weekly initial claims and monthly housing starts. The core PPI is expected to rise 0.2% after the 0.3% jump in December, as pricing power remains weak. Initial jobless claims are expected to rise by 7,000 to 365,000 in the February 11 week after falling in the previous two week. Canadian data at 1330GMT includes the December Int'l securities transaction and the December manufacturing survey.