Asian session: The euro fell against major peers

The euro fell against major peers before data today that may show the currency bloc’s jobless rate climbed to a record and manufacturing contracted, boosting prospects the European Central Bank will cut interest rates. The ECB, which has kept borrowing costs at a record low of 1 percent since December, will probably lower the benchmark rate by 0.25 percentage point on July 5, a Bloomberg News survey of economists shows. The jobless rate in the euro zone probably rose to 11.1 percent in May from 11 percent the prior month, a Bloomberg News Survey of economists showed. It would be the highest on record going back to 1990.

The 17-nation currency posted the biggest jump in more than a year versus the yen on June 29 after euro leaders eased terms on loans to Spanish banks.

Stocks jumped globally on June 29 after euro-area leaders dropped the requirement that governments get preferred creditor status on crisis loans to Spain’s blighted banks. Lenders can also be recapitalized directly with European bailout funds rather than being channeled through governments, European Union President Herman Van Rompuy said after a two-day summit.

Japan’s largest manufacturers expect the yen to trade at an average of 78.93 per dollar in the second half of this fiscal year, the Bank of Japan (8301)’s quarterly Tankan report showed today. They forecast 78.24 in a March survey.

Manufacturer sentiment rose to minus 1 in June from negative 4 in March, according to the report. The BOJ is scheduled to hold a two-day policy meeting starting July 11.

EUR / USD: during the Asian session the pair dropped after Friday’s growth.

GBP / USD: during the Asian session the pair dropped after Friday’s growth.

USD / JPY: during the Asian session the pair dropped after Friday’s growth.

European events for Monday start at 0625GMT when ECB Executive Board member Joerg Asmussen is due to speak on "Can we restore confidence in Europe?", in Athens. France new car registrations data is due a 0700GMT, although today also sees the release of the June final manufacturing PMI data from Spain at 0713GMT, Italy at 0743GMT, France at 0748GMT and Germany at 0753GMT. The EMU data then follows at 0758GMT.  EMU May unemployment is due at 0900GMT at the same time as ECB Governing Council member Ewald Nowotny and also German Chancellor Angela Merkel speak. The UK releases Markit/CIPS Manufacturing PMI for June at 0828GMT.