Forex: Thursday’s review

Yesterday the yen extended its gain against the dollar after data showed U.S. jobless claims for unemployment benefits were unchanged last week and another report showed Philadelphia- area manufacturing decreased in May.

The euro fell to a four-month low as Spain’s borrowing costs rose at an auction, stoking concern that the region’s financial contagion is spreading from Greece.

Europe’s shared currency declined against most of its major counterparts as the European Central Bank said it will temporarily stop lending to some Greek banks.

Spain sold bonds due in January 2015 at an average yield of 4.375%, compared with 2.89% when they were last auctioned in April. Investors bought bonds maturing in July 2015 at 4.876%, compared with 4.037% on May 3 and bonds due April 2016 at 5.106%.

Moody’s Investors Service is set to downgrade the credit ratings of Spanish banks.

The pound was down after the published yesterday quarterly inflation report the Bank of England, in which the British central bank has lowered projections for economic growth in the country and raised its forecast for inflation. Against this background of increased market participants' expectations regarding the continuation of the Bank of England policy of quantitative easing.

EUR/USD: yesterday the pair fell, updated monthly low.

GBP/USD: yesterday the pair fell to a figure, lowered below $1.5800.

USD/JPY: yesterday the pair fell to a figure, lowered below Y79.50.

European data starts at 0600GMT with Germany PPI. At 1000GMT, ECB Executive Board member Jose Manuel Gonzalez-Paramo is due to give a lecture on "Perspectives from the ECB", in London. Ahead of the weekend, G8 leaders meet at Camp David outside Washington.