FOREX

Euro interbank lending rates edged up on Monday as the market focused on how much weekly ECB funding banks will roll at the first tender operation since last week's repayment of almost half a trillion euros.

Global services growth geared down a notch in June, data showed on Monday, supporting the view in financial markets that emerging and developed economies are set to cool off through the second half of the year.

Only China's yuan could rank with the dollar and euro as pillars of the global monetary system, given time and five key tests, Hong Kong's former Monetary Authority chief Joseph Yam was quoted as saying.

The Australian Dollar has opened up in the high 0.8300's this morning after struggling on Friday evening's trade to fall short of 0.8500, following the new Prime Minister Julia Gillard announcement of a compromise position on the RSPT (Resource Super Profits Tax) which became the MRRT (Mineral Resource Rent Tax).

The Australian Dollar has failed to hang onto the gains made last Friday following the announcement by the Australian Government of a resolution to the resource super profits tax issue.

The U.S. dollar slipped against the euro on Friday, extending the previous day's steep losses on concerns over the U.S. economic recovery after disappointing U.S. jobs data. U.S. private payrolls rose less than expected in June and overall employment fell for the first time this year as thousands of temporary Census jobs ended, indicating the economic recovery is failing to gain traction.

U.S. interest-rate futures traders are betting the Federal Reserve will keep short-term interest rates on hold for another year after a government report showed private companies hired fewer people than expected last month, suggesting the economic recovery is losing steam.

The U.S. dollar fell against the euro on Friday, extending the previous day's steep losses on concerns over the U.S. economic recovery after worse-than-expected U.S. jobs data. The report showed a larger-than-expected drop in U.S. June nonfarm payrolls to 125,000, due to layoffs of temporary government workers, even as the unemployment rate unexpectedly fell to 9.5 percent.

With the global economy slowing, interest rates about as low as they can go, governments getting austere and banks being investigated for stress, it is getting harder for investors to keep putting on their bullish faces.

The dollar jumped against the yen but immediately surrendered those gains on Friday after a report showed a larger-than-expected drop in U.S. June nonfarm payrolls to 125,000, while the unemployment rate unexpectedly fell to 9.5 percent.

Bank-to-bank euro funding costs rose again on Friday with the three-month rate hitting a 9-1/2 month high after central bank operations this week drained a chunk of liquidity from the market. Banks paid back 442 billion euros of one-year loans to the European Central Bank on Thursday but borrowed around 243 billion euros in six-day and three-month funds.

Now that China is staying true to its word and letting the yuan trade a bit more freely, analysts and investors outside the mainland may not be prepared for one potential outcome: a yuan drop. China is showing a determination to let the yuan be more volatile against the dollar within its daily 0.5 percent trading band and go with the market flow, contrary to some expectations for another steady rise as happened between 2005 and 2008.

The dollar dipped against a basket of major currencies on Friday, extending the previous day's steep losses on concerns over the U.S. economic recovery and before the all-important June non-farm payrolls data. By 1047 GMT, the dollar index .DXY, a gauge of its performance against six other major currencies, slipped 0.2 percent to 84.539, near a two-month low after it shed 1.6 percent on Thursday.

Hungary will seek a two-year precautionary deal with the IMF and EU for 2011-12 in the range of 10-20 billion euros and hopes to agree with lenders on a higher budget gap than 3 percent of GDP for next year, the Economy Minister said on Friday.

China's yuan jumped against the dollar on Friday to its highest since a landmark 2005 revaluation but its broader gains were less impressive as it slumped against the euro. Traders and analysts said the moves suggested the Chinese central bank wanted to hold the yuan's overall value steady against a basket of currencies by offsetting gains made against the dollar with losses against the euro.

The dollar steadied on Friday after steep losses the previous day on growing concerns about the U.S. economy, with key monthly non-farm payrolls data looming. The greenback hit its lowest this year against the yen below 87 yen on Thursday as market players covered short cross yen positions.

Germany and France will call on the European Commission to submit proposals for a European financial market transaction tax, German Finance Minister Wolfgang Schaeuble said on Friday.

The dollar steadied on Friday after steep losses the previous day on growing concerns about the U.S. economy, with key U.S. non-farm payrolls data looming. The greenback hit its lowest this year against the yen below 87 yen on Thursday as market players covered short cross yen positions.

Asian stocks recovered on Friday after three days of declines but investors remained nervous ahead of a closely-followed U S. job report amid concerns over the U.S. and global outlook. World stocks closed out a dismal second quarter and the 10-year U.S. Treasury yield has fallen below 3 percent as European debt woes and growing fears of a double-dip recession on the back of grim economic data rolled financial markets.

Oil prices rebounded on Friday from 3-week lows, but were still far from reversing the biggest one-day drop in almost a month a day earlier, after a spate of weak manufacturing data reflected slower global economic growth.

Gold bounced from a 5-week low on Friday as weaker prices ignited buying by bargain hunters and jewelers, but investors were cautious ahead of the release of a U.S. employment report. Investors shrugged off a small drop in ETF holdings, turning their attention to the June non-farm payrolls data which will set the tone for currencies and equities. Gold tumbled nearly 4 percent on Thursday as funds sold bullion to cover losses in other markets.

The dollar was on the back foot against the euro and slipped against the Aussie on Friday after a big euro short squeeze ahead of U.S. jobs data, while the yen lost ground all round as the squeeze spilled into Asian trade.

The dollar was on the back foot against the euro and slipped against the Aussie on Friday after a big euro short squeeze ahead of U.S. jobs data, while the yen lost ground all round as the squeeze spilled into Asian trade.

The euro rallied to a five-week high above $1.25 on Thursday, while the dollar fell broadly after disappointing data heightened worries the U.S. economic recovery is stalling. Concerns about euro zone debt and liquidity problems eased further on Thursday after Spain successfully sold 3.5 billion euros of a five-year bond, adding to positive sentiment a day after European banks borrowed less money than expected from a European Central Bank tender.

A slightly lower than forecast 0.2% May Retail Sales result coupled with a 6.6% fall in Building Approvals for the same month saw the Aussie dollar momentarily dip below 0.8320 during yesterday's local session.

The AUD has opened slightly firmer today after it was announced the government and the mining industry had reached a deal on the new profits tax late yesterday.

The dollar fell to a seven-month low against the yen on Thursday as economic reports in both the United States and China added to investors' uncertainty about the global economic recovery. The euro, however, rallied broadly after European banks borrowed less money than expected from a European Central Bank's tender, cooling concerns over euro zone banks' funding issues.

World stocks fell to three-week lows on Thursday and commodity prices sagged after data showing China's rapid growth was losing steam added to worries about the strength of the global economic recovery. Wall Street looked set to track Asian and European peers lower with U.S. stock index futures all in the red.

The dollar touched a seven-month low against the yen on Thursday as Chinese and U.S. economic reports added to investors' uncertainty about the global economic recovery. Chinese manufacturing PMI data showed slower growth in June, heightening concerns over the global economic recovery and weighing on high-yielding currencies.