Asian session: The euro was 0.2 percent from the lowest level since July 2010

02:00 New Zealand Annual Budget Release -

02:30 China HSBC Manufacturing PMI (preliminary) May 49.3 48.7

05:00 Japan BoJ monthly economic report May

The euro was 0.2 percent from the lowest level since July 2010 after German Chancellor Angela Merkel said following a European Union summit that her nation stands by its opposition to jointly issued common bonds. Merkel laid out the German position that “much stronger economic cooperation” in the region is needed before euro bonds can be issued, speaking to reporters in Brussels after the summit. European Council President Herman Van Rompuy said leaders are not under any pressure to introduce euro bonds. The 17-nation currency maintained a drop versus the yen before data forecast to show Europe’s services and manufacturing industries shrank for a fourth month. A euro-area composite index based on a survey of purchasing managers in manufacturing and service industries probably fell to 46.6 this month from 46.7 in April, according to the median estimate of economists surveyed by Bloomberg News. A reading below 50 indicates contraction. London-based Markit Economics will release the figure today.

The Japanese and U.S. currencies remained higher after gaining yesterday against most major counterparts on increasing demand for haven assets amid Europe’s deepening debt crisis.

Demand for the so-called kiwi was limited after a report from HSBC Holdings Plc and Markit Economics today showed a purchasing managers’ index for China’s manufacturing was at 48.7 in May, compared with a final figure of 49.3 last month. If confirmed on June 1, it would mark the seventh-straight month below the 50 level that separates contraction from expansion. China is New Zealand’s second-largest export destination.

EUR/USD: during the Asian session the pair has decreased to a yesterday's low.

GBP/USD: during the Asian session the pair traded in a range $1.5675-$1.5700.

USD/JPY: during the Asian session the pair traded in range Y79.40-Y79.55.

European data for Thursday starts at 0600GMT with the details of German Q1 GDP data, while at the same time, the German finance ministry releases its monthly fiscal and economic report. France sees sentiment data at 0645GMT, while this morning also sees the release of the flash manufacturing and services PMIs for May, starting with France at 0658GMT, where forecasts are for readings close to unchanged with 47.0 for manufacturing and 45.7 for services. Germany releases at 0728GMT with expectations of mixed results, a slightly higher 47.0 for manufacturing and slightly lower 52.0 for services. At 0758GMT the EMU release is expected to see 45.9 for manufacturing, 46.5 for services and 46.6 for the composite number. The Germany Ifo data is due at 0800GMT and is broadly expected to slip slightly lower with the business climate  index at 109.2, the current assessment at 117.0 and the expectations index at 101.8. UK data at 0830GMT includes Services Output data and also the second  stimate of Q1 GDP data along with Q1 Business Investment. US data starts at 1200GMT with Building Permits data and is followed at 1230GMT by weekly jobless claims and Durable Goods Orders. This is followed at 1258GMT by US flash PMI.