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During early European deals on Friday, the euro showed choppy trading against the currencies of U.S., Japan and Switzerland after falling yesterday on ECB President Jean-Claude Trichet's comments.

Trichet said inflation rates could temporarily increase further in eurozone and are likely to stay slightly above 2% for most of 2011, before moderating again around the turn of the year.

The European Central Bank retained its key interest for the 21th consecutive month yesterday as the euro area battles rising inflationary pressures amid the resurfacing of the debt crisis in peripheral economies.
At the Governing Council meeting, the Frankfurt-based central bank led by President Jean-Claude Trichet left the key interest rate unchanged at a record low 1%. The decision was in line with economists' expectations.

As of now, the euro is worth 1.3642 against the dollar, 111.25 against the yen and 1.2910 against the franc, compared to yesterday's close of 1.3636, 111.37 and 1.2894, respectively.

Against the pound, the euro moved sideways in Asian deals, but it declined to a 15-day low of 0.8425 at 3:15 am ET as the pound rose on U.K.'s Halifax house price report. However, the euro rebounded soon and the pair is currently trading near yesterday's close of 0.8452.

Average house prices in the UK rose a seasonally adjusted 0.8% month-on-month in January to GBP 164,173, Halifax said. That was in contrast to analyst expectations for a 0.2% fall. During the three months to January, prices fell 0.7% compared to the preceding three months.

Unemployment reports from the U.S. and Canada for the month of January are expected to influence trading in the upcoming hours.

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Ahead of the release of the U.K. industrial production report for December at 4:30 am ET Thursday, the pound showed mixed trading against its major counterparts. While the pound gained against the euro, it fell versus the dollar, yen and the franc. At 4:25 am ET, the pound traded at 1.6045 against the dollar, 0.8492 against the euro, 132.80 against the yen and 1.5449 against the franc.

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The dollar fell further versus other major currencies on Friday, as popular unrest among strategic U.S. allies has fueled concerns about the nation's role in the Middle East.

Just one week after civil demonstrations toppled Hosni Mubarak in Egypt, the leadership in Bahrain fired on unarmed protesters in an effort to quell the uprising there.

Meanwhile, Federal Reserve Chairman Ben Bernanke was not backing away from the central bank's commitment to support the economy with massive bond purchases.

Speaking to finance ministers in France, Bernanke said emerging nations have benefited from the easy monetary policy adopted by developed economies.

He urged China to let its currency float in the open market, and to focus on improving domestic demand rather than rely on the U.S. consumer for growth.

Earlier in the day, China raised the reserve requirements for its banks, hoping to contain inflation in the world's most robust major economy.

Meanwhile, consumer prices leveled off a bit in Canada last month.

Stripping out volatile energy prices, Canada's Consumer Price Index (CPI) rose a tame 1.7 percent in the 12 months to January, identical to the increase in December.

The Bank of Canada's closely-watched core index advanced 1.4 percent annually in January, following a 1.5 percent rise in December.

Still, with commodity prices on the rise, the dollar hovered near this week's 2-year low of C$0.9814 versus the resource-linked loonie.

Versus the euro, the dollar dropped a penny to a nearly 2-week low of $1.3675.

The buck pulled back from a monthly high against the yen, slipping to Y83.13.

Members of the Japanese central bank's policy board felt more confident of the economic recovery last month amid signs of a rebound in exports, meeting notes of the January policy meeting showed.

Bank of Japan policymakers also felt the negative effects of the removal of government subsidies would wane, lifting the economy to "a moderate recovery path."

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Following the release of Canada's industrial product price and raw materials price indexes-both for January at 8:30 am ET, the Canadian dollar remained stronger against its major counterparts. The loonie is presently trading at 0.9722 against the US dollar, 1.3442 against the euro and 84.31 versus the yen.

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German insolvency courts reported 13,454 insolvencies in December, 1% less than December last year, the Federal Statistical Office said Thursday.

The total number of corporate insolvencies fell 1.9% year-on-year to 2,534, while insolvencies of consumers fell 0.8%.

In 2010, altogether 168,458 insolvencies were registered, representing an annual increase of 3.4%. While corporate insolvencies fell 2.1%, consumer insolvencies climbed 4.8% compared to 2009.

News are provided by InstaForex.

European Economics Preview: German Unemployment Data Due

Unemployment figures from Germany and Eurozone and mortgage approvals from the U.K. are the major statistical reports due on Tuesday, headlining a busy day for the European economic news.
At 2.00 am ET, the Federal Statistical Office is scheduled to issue German retail sales figures for December. Economists forecast retail sales to rise 0.8 percent month-on-month after easing 1 percent in November.
French consumer spending and producer prices are due at 2.45 am ET. Consumer spending is forecast to rise 0.2 percent month-on-month after falling 0.1 percent in November. Producer price inflation is seen slowing to 4.7 percent annually in December from 5.6 percent in November.
Spain's flash HICP and Hungary's PPI and unemployment reports are due at 3.00 am ET. Economists forecast Spanish inflation to slow slightly to 2.3 percent in January from 2.4 percent in December.
The Federal Labor Agency is set to release German unemployment data at 3.55 am ET. The number of unemployed is forecast to fall by 10,000 in January. The seasonally adjusted jobless rate is seen stable at 6.8 percent.
At 4.00 am ET, Norway's retail sales and C2 credit indicator figures are due. Retail sales growth is seen at 2.2 percent annually, faster than the 0.9 percent increase in November.
The Bank of England is set to publish mortgage approvals figures at 4.30 am ET. The number of mortgage approvals is seen at 54,000 in December compared to 52,900 in November. M4 money supply data is also due at the same time.
Eurozone jobless data for December is due from Eurostat at 5.00 am ET. The unemployment rate is forecast to rise to 10.4 percent from 10.3 percent in November.




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Euro Extends Slide Against Most Majors

The euro extended its Tuesday's decline against most major currencies in early Asian deals on Wednesday amid weak U.S. economic data and uncertainty about Greece's debt crisis.
The euro that closed Tuesday's New York session at 99.81 against the yen fell to a 9-day low of 99.46 in Asian deals. The next downside target level for the euro-yen pair is seen at 99.0.
Against the Swiss franc, the euro slipped to a fresh 4- 1/2 -month low of 1.2034, compared to Tuesday's close of 1.2040. If the euro-franc pair weakens further, it will break 1.20 and target the 1.180 level.
The euro declined to a fresh multi-year low of 1.5823 against the New Zealand dollar with 1.50 seen as the next downside target level. At yesterday's close, the euro-kiwi pair was quoted at 1.5841.
The euro dropped to 9-day lows of 1.2290 against the Australian dollar and 1.3093 against the Canadian dollar, compared to yesterday's close of 1.2326 and 1.3122, respectively. The next downside target level for the euro is seen at 1.223 against the aussie and 1.306 against the loonie.
But the euro moved sideways against the US dollar and pound after falling to multi-day lows yesterday. The euro is currently worth 1.3071 against the dollar and 0.8296 against the pound, compared to yesterday's close of 1.3085 and 0.8303, respectively.
Investors now focus on the European session, in which U.K. Nationwide house price index for January, Swiss retail sales for December, final PMI reports for January from major European economies and the Eurozone CPI estimate for January are slated for release.
The U.S. ISM manufacturing index and ADP employment report - both for January and the construction spending for December are expected in the New York morning session.




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European Economics Preview: Eurozone Producer Price Data Due

Producer prices from Eurozone and Purchasing Managers' survey results from the U.K. are the major reports due on Thursday, headlining a light day for the European economic news. In addition, Spain and France are set to conduct debt auctions.
At 2.00 am ET, the Federal Customs Administration is slated to publish Swiss December trade data. The trade surplus is expected to fall to CHF 2.5 billion from CHF 2.95 billion in November.
U.K. CIPS/Markit construction Purchasing Managers' survey results are due at 4.30 am ET. The indicator is seen rising to 52.5 in January from 53.2 in December.
Spain is set to raise EUR 3.5 billion to EUR 4.5 billion through a bond auction at 4.30 am ET. The issue includes bonds maturing on January 2017, July 2015 and October 2016.
At 4.50 am ET, France is set to issue longer term bonds or OATs. The Agence France Tresor will auction bonds with 7, 8, 10 years maturity. The agency aims to raise between EUR 6.5 billion and EUR 8 billion.
At 5.00 am ET, Eurostat is scheduled to issue euro area producer price figures for December. Producer price inflation is forecast to slow to 4.3 percent in December from 5.3 percent in November. On a monthly basis, producer prices are expected to drop 0.1 percent.
The Czech National Bank is set to announce its interest rate decision at 7.00 am ET. The central bank is widely expected to retain the rate at 0.75 percent.

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China Intensifies Opposition to Iran Sanctions, Calls for Dialogue to Resolve Issue

News
China's People's Daily stepped up Beijing's opposition to tighter sanctions against Iran, warning that such moves are hurting energy markets and could stifle the global economic recovery.
Reports come a day after German Chancellor Angela Merkel urged Beijing to use its influence to persuade Iran to give up its nuclear weapons programme.
The commentary reiterated China's stance that dialogue should be used to resolve the Iranian nuclear issue


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European Economics Preview: German Factory Orders Data Due

Industrial orders from Germany and Eurozone sentix investor confidence are the major reports due at the start of the week, headlining a light day for the European economic news.
The Czech statistical office is slated to release industrial and construction output figures at 3.00 am ET. After rising 5.4 percent in November, industrial production is forecast to grow 1.5 percent annually.
The Society of Motor Manufacturers and Traders is set to publish U.K. new car registrations data for January at 4.00 am ET. Registrations were down 3.7 percent in December.
Eurozone sentix investor confidence is due at 4.30 am ET. The confidence index had fallen to -21.1 in January from -24 in December.
At 6.00 am ET, Germany's Federal Ministry of Economy and Technology is scheduled to issue factory orders for December. Economists forecast industrial orders to grow 1 percent month-on-month after falling 4.8 percent in November. On a yearly basis, a 0.8 percent fall is expected.
At 9.00 am ET, French T-bill auction is due. The government aims to raise EUR 2.1 billion from 182-day T-bills and EUR 2.2 billion from 364-day bills. Also, it will issue EUR 4.2 billion 91-day bills.


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