Asian session: The euro headed

The euro headed for its biggest weekly decline in more than six months amid signs the region’s debt crisis is weighing on economic growth.

The 17-nation currency held a two-day fall against the yen before data today forecast to show industrial production in Germany and Spain declined. German industrial output probably declined 1.2 percent in May from a year ago, according to economists surveyed by Bloomberg News before the Economy Ministry in Berlin releases its figures.

The European Central Bank and the People’s Bank of China cut their benchmark borrowing costs yesterday, while the Bank of England expanded the size of its asset-purchase program. “Downside risks to the euro-area economic outlook have materialized,” ECB President Mario Draghi said yesterday after cutting the main refinancing rate by a quarter-percentage point to a record low and reducing interest on overnight deposits to zero. “Economic growth in the euro area continues to remain weak with heightened uncertainty,” he said.

Demand for yen was limited after China cut its key interest rate for the second time in a month yesterday and the Bank of England raised the target in its asset-purchase stimulus program by 50 billion pounds ($78 billion) to 375 billion pounds.

EUR / USD: during the Asian session the pair fell to yesterday’s low.

GBP / USD: during the Asian session the pair holds in range $1.5515-$1.5535.

USD / JPY: during the Asian session the pair rose to Y80.00.

There is a busy data calendar on Friday, with the main focus on the US labor market data at 1230GMT. Ahead of then, European data starts at 0645GMT with France foreign trade and government deficit data.  At 1000GMT, German industrial output data for May is expected to come in at +0.2% m/m, -1.9% y/y. US data starts at 1230GMT with the main labor market data for June, where non-farm payrolls are forecast to rise by 100,000 after relatively modest readings in the previous two months. The unemployment rate is forecast to hold steady at 8.2% after rising in May.