Asian session: The euro erased losses

The euro erased losses as Asian shares pared declines and amid prospects central banks will take further steps to support growth.

The 17-nation currency rose against the yen after Italian Prime Minister Mario Monti was quoted as saying the country may want its sovereign bonds to be purchased by the region’s rescue funds and the European Central Bank. Monti and French President Francois Hollande said yesterday the two countries are “determined” to do everything to protect the integrity of euro zone.

ECB President Mario Draghi pledged last week to do whatever it takes to preserve the currency. He has a proposal that involves the EFSF buying government debt on the primary market, buttressed by ECB purchases on the secondary market to ensure lenders transmit its record-low interest rates, two central bank officials said on July 27 on condition of anonymity. Further ECB interest-rate cuts and long-term loans to banks are also up for discussion, one of the officials said.

Demand for the greenback was limited before a private payrolls report today forecast to show the pace of hiring in the U.S. slowed, supporting bets the Fed will signal additional stimulus which would debase the currency.

Companies probably added 120,000 jobs last month, down from 176,000 in June, according to the median estimate of economists surveyed by Bloomberg before ADP Employer Services releases its data today. The Labor Department is scheduled to release its monthly jobs report on Aug. 3, with the unemployment rate predicted to remain unchanged at 8.2 percent, according to a separate poll.

EUR / USD: during the Asian session the pair was trading in range $1.2280-$1.2300.

GBP / USD: during the Asian session the pair was trading in range $1.5655-$1.5675.

USD / JPY: during the Asian session the pair dropped, updating week’s low.

Wednesday morning also sees the release of the manufacturing PMIs, including Spain at 0713GMT, Italy at 0743GMT and the final manufacturing PMIs from France at 0748GMT, Germany at 0753GMT and the EMU data at 0758GMT.The weekly MBA.  Preliminary results from the others were 43.6 in France, 43.3 from Germany and 44.1 for the EMU data. Germany releases chine orders data at 0800GMT. The UK Nationwide House Prices index gets things started at 0600GMT Wednesday. UK manufacturing PMI is due at 0828GMT and is expected to decline to 48.0. Mortgage Application Index is due at 1100GMT, followed at 1215GMT by the ADP National Employment and then at 1258GMT by the US Markit PMI data. Data at 1400GMT includes the ISM Index,Help-wanted and also Construction Spending data. The weekly EIA Crude Oil Stocks data then follows at 1430GMT. At 1815GMT, the Federal Open Market Committee issues the statement on its latest monetary policy decisions, following two days of meetings.