* Canadian Retail Sales post an impressive 1% rise both headline and ex-auto in June, both measures far exceeding expectations.
* US Midwest Manufacturing Index rises to 79.7 in July from 77.1 in June.
* ECB’s Mersch says current recovery not sustainable, expects banks to have to make more bad loan provisions by year end.
A quiet day in the markets with little new to chew over with the Bernanke comments of last Friday still making their impact felt.
Eur/Usd started the session at 1.4310 after taking a brief dip down to 1.4280 in European trading. The positive mood in global equity markets coupled with a nice surprise from the consumer side of things in Canada pushed the pair up to offers in the 1.4345/50 area. Unable to make any further headway and with the nascent rally in stocks checking back somewhat profit taking took the pair gradually lower until we again found support in the 1.4285 area.
Eur/Gbp was the star performer of the session, knocking out a barrier option at 0.8700, before running into offers at 0.8730.
The Loonie responded well to better than expected Canadian Retail Sales data pushing the Dollar back to a low at 1.0726 from 1.0785, before the general stronger Dollar strength restored the pair back up to that 1.0785 level.