• Spain June jobless falls 55,250 vs 24,741 in May as public works programme creates hundreds of thousands of temporary jobs
  • China’s Vice Foreign Minister He Yafel says not aware of any plan to discuss a new reserve currency at next weeks G8 summit
  • Japan government continues to consider dollar key global currency - MOF official tells Market News
  • SNB’s Jordan: Ready to continue interventions to fight rise in swiss franc. Will be on ad- hoc basis. Bank in strong position of strength as it pursues “massive” QE.
  • Spain’s June consumer confidence 66.4 vs 63.8 in May
  • Italy Q-1 2009 budget deficit-to-GDP ratio hits record 9.3% – Istat
  • BOE’s Besley: Little point in now speculating exact trigger for unwinding QE. Premature to give definitive assessment of QE’s macroeconomic effectiveness
  • UK construction PMI falls to 44.5 in June from 45.9 in May, worse than median forecast of 46.0
  • Euro zone unemployment hits 9.5% in May, worse than median forecast of 9.4% and 10-year high
  • Euro zone May PPI -0.2% m/m, -5.8% y/y, weaker than median forecasts of +0.1%, -5.6% respectively
  • Russia has not seen official China request for debate on global reserve currency proposal at G8 summit – Fin Min source

USD firm across the board, EUR/USD down at 1.4070 from an early 1.4110, while cable is down at 1.6365 from early 1.6440.

Greenback has been supported by various Chinese, Japanese, Russian comments surrounding the reserve currency issue (see all above.) It has also garnered support from a slight dip in risk sentiment, with European stocks getting hit and S&P futures pointing to a lower opening in North American markets.

EUR/USD sits at 1.4070, but it’s taken an absolute age to get there. Sources reported buy orders at 1.4080/00 early, and for most of the morning these soaked up the selling pressure. As it is we’ve only been down to 1.4066 so far. More buy orders noted down at 1.4050 and then 1.4030.

Cable slid early, but for awhile 1.6400/10 area provided durable support. But finally on about the fourth attempt it gave way, triggering stops just below and we saw a sharp sell-off which reached a 1.6330 session low.

Cable was weighed down by the reserve currency rhetoric, dented risk sentiment and a strong rally in the EUR/GBP cross.

Cable losses accelerated when buy stops in EUR/GBP were triggered around .8610 seeing a quick spurt to a 8629 session high where is ran into good sell interest. We’re presently back down at .8590.

USD/JPY is little changed at 96.70, up about 10 points.