European session: the euro fell

The euro weakened as Germany’s economy ministry said the outlook for faster growth was fading amid the currency-bloc’s sovereign-debt crisis.

The prospect of global economic recovery is “fragile,” Germany’s economy ministry said in its report for August. The nation’s economy “moderately” expanded in the second-quarter compared with the first-quarter, it said.

The greenback strengthened  as China’s export growth collapsed, boosting demand for the currencies as havens.

China’s exports rose 1% in July from a year earlier, following an 11.3% increase in June, the customs bureau said in Beijing. That compared with the median estimate of economists for an 8% gain.

EUR/USD: during European session, the pair remained under pressure and fell to $1.2260 area.

GBP/USD: the pair decreased, showing low at $ 1.5576. Later the pair restored to $1.5600 area.

USD/JPY: during European session, the pair approached the support in Y78, 35 area.

US data for Friday starts at 1230GMT with the July Import / Export Price Index. Later data sees the 1900GMT release of the Treasury Budget Statement where the Treasury is expected to post a $103.0 billion budget gap in July, compared with the $129.4 billion gap in July 2011.