Asian session: The euro dropped to a three-week low

00:00 Australia Consumer Inflation Expectation February +2.8% +2.5%

00:30 Australia Changing the number of employed January -29.3 10.9 46.3

00:30 Australia Unemployment rate January 5.2% 5.3% 5.1%

The euro dropped to a three-week low before German and Italian leaders meet tomorrow ahead of a finance ministers’ gathering next week to decide on a second bailout package for Greece. The 17-nation currency slid for a second day versus the yen before Spain and France sell debt amid concern a delay in Greek aid will increase borrowing costs for the region.

German Chancellor Angela Merkel will travel to Rome tomorrow for talks with Italian Prime Minister Mario Monti, her spokesman Steffen Seibert said yesterday in Berlin. The leaders will hold a joint press conference after the meeting.

France and Spain are scheduled to auction as much as 14.3 billion euros ($18.6 billion) in bonds today, three days after Moody’s cut the ratings of six European nations including Spain and revised its credit outlook on France to “negative.”

The dollar advanced versus most major counterparts as Moody’s said it may lower UBS, Credit Suisse and Morgan Stanley’s ratings by as many as three levels. Goldman Sachs Group Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Citigroup Inc. are among companies that may be downgraded by two grades, the ratings company said, adding that the “guidance is indicative only.”

Australia’s currency climbed versus its New Zealand counterpart after a report showed the larger nation’s unemployment rate unexpectedly declined.

EUR/USD: during the Asian session the pair gain, corrected after yesterday's falling.

GBP/USD: during the Asian session the pair gain fixed above $1.5700.

USD/JPY: during the Asian session the pair gain, updated new week’s high.

Another heavy calendar on Wednesday, European growth data continues at 0700GMT, with the release of German Q4 data. UK labour data is expected at 0930 GMT. The Markit reports for REC/KPMG showed some growth in both temporary/contract work and permanent placements in December followed by a marked acceleration in jobs growth in January. This tallies with the pick-up in the activity data. The three-monthly ILO data will still show a marked rise in unemployment, as the outturn for the first two months is known (bar revisions), but claimant count jobless is expected to show another minimal rise and the data overall should provide evidence the deterioration in the labour market is easing. At 1030GMT, the BOE releases its Quarterly Inflation report.