EUROPEAN session review: euro and sterling dropping

Data released (actual, consensus, previous):                   

09:00 GMT EMU Consumer Price Index (YoY) (May) 1.4%    1.4%    1.2%        

09:00 GMT EMU Consumer Price Index - Core (YoY) (May)  1.2%    1.2%    1.0%        

09:00 GMT EMU Consumer Price Index (MoM) (May)   0.1%    0.1%    -0.1%        

09:00 GMT EMU Employment Change (QoQ) (Q1)   -0.5%   _     -0.3%        

09:00 GMT EMU Employment Change (YoY) (Q1)  -1.0%  _      -0.8%        

09:00 GMT UK CB Leading Economic Index (May)  0.2%    _    0.4%

The U.S. dollar rises again euro and sterling amid reports that Fed Chairman Ben Bernanke next week will try to calm fears that any move to reduce the pace of its bond buying won’t mean the Fed is close to ending the program. Bernanke is scheduled to hold a press conference on Wednesday.

Investors will weigh more U.S. economic data on Friday. A preliminary report of consumer sentiment in June could show an index reading of 84.7, which would be the best reading in nearly six years. Also, the Federal Reserve’s report on industrial production could show a rise of 0.1% in May, following a drop in April.

EURO:

Data released showed EMU Consumer Prices in the euro area expanded 1.4% in a year to May, matching previous estimates and up from April’s 1.2%. The Core reading rose 1.2%, up from 1.0% previous.

Standard & Poor's has affirmed Spain's long-term sovereign debt rating at BBB-, just one notch above speculative grade, with a negative outlook.

EUR/USD holds at $1.3307 with a break under $1.3266 (low Jun.12) would target $1.3233 (MA10d) . On the upside, the next hurdle lies at $1.3390 (high Jun.13) followed by $1.3434 (high Feb.20) and then $1.3456 (high Feb.14).

POUND:

The pound weakens Friday, despite strong reports.

House prices in England and Wales rose to a record in May: the average cost of a home rose 0.4% from April to 233,061 pounds ($365,000). Prices were up 2.7% from a year earlier.

GBP/USD is going forward to  $1.5605/00 (100-day SMA/psychological level). Next support is at 1.5520. Resistance comes at yesterday’s highs on $1.5740 (4-months highs), Next resistances could be found at $1.5765 (Feb 7 high) and $1.5800 (psychological level).

YEN:

Released minutes of the Bank of Japan’s last meeting showed a few members of the policy-setting board believed the current monetary-policy framework doesn’t rule out the possibility of further measures, if needed.

USD/JPY holds near Y95.00 with further resistance is around Y96.20 (Jun 12 hourly highs) and Y97.00 (Jun 12 highs). Minor support placed at Y94.40 (Asian lows), then - at Thursday’s lows on Y93.80. Below support comes at Y93.50 (Mar 25 lows) and then - at Y92.50 (Apr 2 lows).

DATA AHEAD:

At 12:30 GMT US will present Producer Price Index, ahead of 13:15 GMT Industrial Production and Reuters/Michigan Consumer Sentiment Index due at 13:55 GMT.

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