The euro fell versus the dollar and the yen amid speculation European Central Bank President Mario Draghi will announce measures as soon as this week to ease the region’s debt crisis.

Draghi said yesterday the bank’s primary mandate compels it to intervene in bond markets to wrest back control of interest rates and ensure the euro’s survival. The ECB announces its next policy decision on Sept. 6.

The 17-nation currency traded at almost the strongest in two months versus the dollar as European leaders stepped up shuttle diplomacy before erasing gains as global stocks declined.

European Union President Herman Van Rompuy traveled to Berlin for talks with German Chancellor Angela Merkel today as Italian Prime Minister Mario Monti hosts French President Francois Hollande in Rome.

Australia’s dollar climbed from a six-week low against the greenback after the Reserve Bank of Australia refrained from cutting the developed world’s highest benchmark rate.

The dollar briefly pared gains against major counterparts after a report showed manufacturing in the U.S. contracted for a third month.

• For direct bank recapitalization ESM to create a single banking supervisory authority
• ECB may oversee banks only if the mandate to ensure price stability remains intact
• Lowering of interest rates in July, in some cases, no effect on the economy
• The euro may be stable only if its existence is not in doubt

EUR/USD $1.2500, $1.2540, $1.2550, $1.2600, $1.2700

USD/JPY Y78.00, Y78.45, Y79.00

EUR/JPY Y96.00

AUD/USD $1.0325

EUR/GBP stg0.8005

Data
01:30 Japan Labor Cash Earnings, YoY July -0.6% -0.3% -1.2%
01:30 Australia Current Account, bln Quarter II -14.9 -12.3 -11.8
04:30 Australia Announcement of the RBA decision on the discount rate September 3.50% 3.50% 3.50%
04:30 Australia RBA Rate Statement -
05:45 Switzerland Gross Domestic Product (QoQ) Quarter II +0.7% +0.2% -0.1%
05:45 Switzerland Gross Domestic Product (YoY) Quarter II +2.0% +1.6% +0.5%
08:30 United Kingdom PMI Construction August 50.9 50.1 49.0
09:00 Eurozone Producer Price Index, MoM July -0.5% +0.3% +0.4%
09:00 Eurozone Producer Price Index (YoY) July +1.8% +1.6% +1.8%

During the session, the euro close to two-week high against the yen on speculation the European Central Bank President Mario Draghi announced a plan to buy bonds in the region, which will increase confidence in the currency.
The single currency rose for a third day against the dollar after a member of the European Parliament, Jean-Paul said yesterday that Draghi told lawmakers that he will buy bonds with maturities of up to three years.
The Australian dollar rose after the Reserve Bank at its meeting again refrained from cutting interest rates, which are the highest among the developed countries of the world at a political rally.
The pound fell against the dollar after the data has registered a decline in business activity index in the construction sector below 50, indicating contraction.
The dollar index (DXY), which is used to track the value of the dollar against six major currencies, was down by 0.1% to 81.165.
Sterling fell against the single currency on speculation that the European Central Bank President Mario Draghi will announce the details of the purchase of bonds in the political council this week to help in overcoming the debt crisis in the region. Also reported the decline in yield on 10-year UK government bonds.
The Swiss franc weakened against the dollar after it became known that the level of the Swiss GDP for the second quarter decreased by 0.1%, which was the first time in three quarters.

EUR / USD: during the European session the pair reached a high of $ 1.2626, and then fell to session lows
GBP / USD: the pair grown, updating the yesterday's high, but I could not hold out and fell to a session low below
USD / JPY: pair almost came close to the lowest level on Monday, and then grew up and is now trading at Y78.35

In the U.S. at 13:00 GMT will index of business activity in the manufacturing sector, 14:00 GMT - ISM manufacturing index for August and 20:30 GMT - the change in volume of crude oil, according to API. Finish the day at 23:30 GMT Australia data on the index of activity in the service sector of the AiG in August.

EUR/USD

Offers $1.2700, $1.2680, $1.2650, $1.2625/30

Bids $1.2585/80, $1.2555/50, $1.2520/15

AUD/USD

Offers $1.0380/90, $1.0350, $1.0325, $1.0300

Bids $1.0200, $1.0170, $1.0150

GBP/USD

Offers $1.6000, $1.5980, $1.5950, $1.5930/35

Bids $1.5855/50, $1.5830, $1.5820, $1.5800, $1.5765

EUR/JPY

Offers Y100.00, Y99.80, Y99.45/50

Bids Y98.55/50, Y98.00, Y97.85/80

USD/JPY

Offers Y78.90, Y78.80, Y78.60, Y78.50

Bids Y77.80, Y77.50

EUR/GBP

Offers stg0.8000, stg0.7980, stg0.7950

Bids stg0.7890

• May require action by the ECB to show irreversibility euro

• ECB aid - not a substitute for fiscal reforms

• There is no doubt that the ESM will be operational in the coming months

• In the following weeks the situation should become clearer

• We need to know the conditions of assistance, before asking for it

EUR/USD $1.2500, $1.2540, $1.2550, $1.2600, $1.2700

USD/JPY Y78.00, Y78.45, Y79.00

EUR/JPY Y96.00

AUD/USD $1.0325

EUR/GBP stg0.8005

USD/CHF Chf0.9750, Chf0.9540

01:30 Japan Labor Cash Earnings, YoY July -0.6% -0.3% -1.2%

01:30 Australia Current Account, bln Quarter II -14.9 -12.3 -11.8

04:30 Australia Announcement of the RBA decision on the discount rate September 3.50% 3.50% 3.50%

04:30 Australia RBA Rate Statement

Yesterday the euro traded in a narrow range against the U.S. dollar in relation to the output in the U.S. and Canada. Against this background, the market activity is quite low.

(pare/closed(00:00 GMT +02:00)/change, %)

EUR/USD $1,2587 +0,10%

GBP/USD $1,5882 +0,11%

USD/CHF Chf0,9539 -0,09%

USD/JPY Y78,29 -0,08%

EUR/JPY Y98,54 -0,02%

GBP/JPY Y124,33 -0,01%

AUD/USD $1,0243 -0,78%

NZD/USD $0,7975 -0,71%

01:30 Japan Labor Cash Earnings, YoY July -0.6% -0.3%

01:30 Australia Current Account, bln Quarter II -14.9 -12.3 -11.8

04:30 Australia Announcement of the RBA decision on the discount rate September 3.50% 3.50%

04:30 Australia RBA Rate Statement -

05:45 Switzerland Gross Domestic Product (QoQ) Quarter II +0.7% +0.2%

05:45 Switzerland Gross Domestic Product (YoY) Quarter II +2.0% +1.6%

07:00 United Kingdom Halifax house price index August -0.6% +0.3%

07:00 United Kingdom Halifax house price index 3m Y/Y August -0.6% -0.8%

08:30 United Kingdom PMI Construction August 50.9 50.1

09:00 Eurozone Producer Price Index, MoM July -0.5% +0.3%

09:00 Eurozone Producer Price Index (YoY) July +1.8% +1.6%

14:00 U.S. ISM Manufacturing August 49.8 50.1

14:00 U.S. Construction Spending, m/m July +0.4% +0.4%

23:30 Australia AIG Services Index August 46.5