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 The dollar hovered near a seven-week high against a basket of major
currencies, boosted by lower U.S. jobless claims. The dollar index
is up 1.6 percent this week.
The euro <EUR=> was mired close to a seven-week low of $1.0854, hit
in the previous session. The dollar touched a three-week high of
124.23 yen <JPY=>.
Attention has returned to gauging the timing of the next U.S. rate
rise, with investors keen for clues in U.S. CPI data and Michigan
sentiment data due out later in the session.
"The focus is turning to the U.S. rate cycle, and (the market
reckons) a September rate hike is still, if not probable, at least
possible," RBC Capital Markets global head of FX strategy, Adam
Cole, said. "That's picked up from Greece as the main driver of our
market and therefore the dollar is, in a fairly parallel move,
stronger off the back of it ... From now the euro goes down
primarily because the dollar is going up."
Euro zone shares eased as a relief rally over Greece's bailout
agreement ran out of steam. The Euro STOXX 50 lost 0.1 percent but
has rallied 8 percent over the last two weeks, its biggest
fortnightly gain since January. [.EU]
German yields were lower at the opening of a parliamentary debate in
Berlin, as the government sought approval for talks on a third
bailout program for Greece. [GVD/EUR]
Following its successful passage through the Greek parliament,
German lawmakers are expected to give Berlin a green light to start
negotiations.
Analysts said that with the risk of a Greek exit from the euro zone
diminished, the market would focus again on policy divergence
between the Fed, which is pondering rate rises, and monetary easing
by the ECB.
"There is a little bit of an anticlimax after the Greece
headlines... A lot of people did not expect the worst to happen and
so money had already poured in," Peregrine & Black trader, Markus
Huber, said.
"Along with the focus on central bank timing of interest rate hikes,
both (Bank of England governor Mark) Carney and (Federal Reserve
President Janet) Yellen, that's probably why the market is going
back and forth."
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Sterling hit its highest against the euro in more than 7-1/2 years
after Carney said the decision to raise rates will come into
"sharper focus" around the end of 2015, his strongest hint yet about
the timing of the bank's next move.
The MSCI World Index, which tracks stocks from developed economies,
is up 2.2 percent this week, its biggest weekly gain since May.
MSCI's broadest index of Asia-Pacific shares outside Japan was up
0.3 percent as Chinese shares recovered further after a series of
government support measures to halt their recent crash.
Advancing for the second straight day, Shanghai shares rose 3.5
percent. [.SS]
Although drastic government measures have managed to stem its slide,
the benchmark Shanghai index is still down roughly 20 percent from a
7-1/2-year peak reached a month ago.
Brent crude oil rose slightly, underpinned by a weaker dollar and a
power outage at Britain's largest oilfield, though a supply glut
kept prices pinned near $57 per barrel. [O/R]
Plentiful supply also crimped platinum prices, which fell below
$1,000 an ounce for the first time since February 2009. A seasonal
drop in demand for metals also kept copper under pressure.
(Additional reporting by Jemima Kelly and Lionel Laurent; Editing by
Louise Ireland)
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