* Speculators build positions before UK GDP data
* Q2 growth expected at 0.6 pct
* Strong data unlikely to change Bank of England policy outlook
LONDON, July 23 (Reuters) - Sterling was steady on Tuesday, trading near a four-week high against the dollar, on expectations that UK growth numbers due this week will point to a sustained recovery.
The pound was also helped by a slight narrowing of spreads between 10-year U.S. Treasuries US10YT=RR and UK gilt yields
GB10YT=RR on reduced expectations that the Federal Reserve will start withdrawing monetary stimulus in the short term.
The spread had been at its widest in seven years late last week, giving the dollar a boost.
Traders were, however, unwilling to get aggressively long with the Bank of England likely to keep monetary policy loose despite improving data. ECONGB
The pound GBP=D4 traded at $1.5350, having hit a high of $1.5385 on Monday which was its highest since June 26. The euro was slightly higher against sterling at 85.90 pence EURGBP= with most investors on the sidelines before flash euro zone purchasing managers' index (PMI) surveys on Wednesday. ECON
In the UK, data on Thursday is forecast to show the economy grew 0.6 percent in the second quarter from the previous quarter and 1.4 percent on the year.
"Q2 GDP data will illustrate whether the economy really is improving," said Antje Praefcke, currency strategist at Commerzbank.
"Until then sterling might well be able to defend its gains, as long as the risk-on sentiment continues. Short term cable longs might therefore be interesting because, with $1.5350 taken out, there is now scope as far as $1.5480."
Above-forecast June retail sales, improving labour market conditions and Bank of England minutes unexpectedly showing all nine rate-setters opposed to more stimulus, have helped the pound in the past few sessions.
"We think that despite improving data, sterling remains a big sell," said Peter Frank, currency strategist at BBVA.
"The problem for sterling is that the recovery is both tentative and unbalanced," he said, adding that the Bank of England will have to support the economy through more stimulus. BBVA expects sterling to end 2013 at $1.4530.
(Reporting by Anirban Nag; editing by Stephen Nisbet)
BRUSSELS, July 23 (Reuters) - The European Union has renewed anti-dumping duties on ironing boards imported from China for a further five years, but lifted corresponding tariffs on the product from Ukraine.
The extension, announced on Tuesday, follows an appeal by three EU iron board makers against the potential ending of measures taken in 2007. They contended that Chinese producers in particular would resume dumping, selling at below cost or fair market price.
The EU market for ironing boards is worth around 100 million euros ($131.9 million), a tiny fraction of the 290 billion euros of goods imported from China, but the extension of measures is a further irritant to Chinese producers and the Beijing government.
EU-China trade tensions are high. The EU last month began imposing duties on imports of solar panels from China, worth 21 billion euros in 2011, prompting Beijing to launch an investigation into EU wine.
For ironing boards, Chinese producers had a 40-45 percent share of the EU market, with annual sales of some 10 million boards, but this fell to 15-20 percent in 2011 after duties were imposed.
The notice in the Europe Union's official journal on Tuesday said the Chinese were still undercutting the prices of EU makers by 20 percent.
It concluded that a repeal of anti-dumping measures would result in increased Chinese exports at dumped pricing levels.
For Ukraine, with single producer Eurogold Industries Ltd, its share of the market actually rose to 10 from 8 percent, even with duties, principally because Chinese competition eased.
Duties were originally set in 2007 at 9.9 percent for imports from Ukraine and up to 38.1 percent for those from China. In 2010 the EU cut the Ukraine tariff to 7.7 percent and introduced a new top rate for Chinese producers of 42.3 percent.
The three EU producers bringing the complaint were Italy's Colombo New Scal SpA, Poland's Rorets Polska Spolka and Vale Mill (Rochdale) Ltd of Britain. ($1 = 0.7580 euros)
(Reporting By Philip Blenkinsop; Editing by Alistair Lyon)
MUMBAI, July 23 (Reuters) - The Reserve Bank of India capped the borrowing limit for an individual standalone primary dealer under the central bank's daily repo window at 100 percent of net owned funds from July 24.
The cap, part of a series of measures to drain liquidity and prop up a falling rupee, will also apply on reporting Fridays of the two-weekly cycle, when the RBI conducts two repo auctions, it said in a release on Tuesday.
(Reporting by Neha Dasgupta; Editing by John Stonestreet)
BRUSSELS, July 23 (Reuters) - Consumer morale in the euro zone improved by more than expected in July, rising to its highest level in almost two years, the European Commission said on Tuesday.
Consumer confidence in the 17 countries using the euro jumped to -17.4 points in July from -18.8 points in June, beating market expectations for a rise to -18.30 points. The reading was the best since August 2011, when it stood at -16.8.
In the whole of the European Union, consumer confidence recovered even faster to -14.8 from -17.5 in June.
Improving consumer confidence follows on from better manufacturing data this week and points to a recovery in the second half of this year to pull the euro zone out of recession.
(Reporting by Martin Santa; editing by Robin Emmott)
* Brazil posts current account gap of $3.953 billion in June
* Foreign direct investment rises to $7.17 billion
* FDI unlikely to cover large current account gap this year
BRASILIA, July 23 (Reuters) - Brazil's current account deficit narrowed in June from a year ago, central bank data showed on Tuesday, although the Latin American giant may still be unable to cover that gap this year with direct investment from abroad.
The country posted a current account gap BRCURA=ECI of $3.593 billion in June, below an expected deficit of $4.8 billion, according to the median forecast of 13 analysts in a Reuters survey. The forecasts for the projected deficit ranged from $5.6 billion to $4.2 billion.
In June 2012, Brazil had a deficit of $4.4 billion. The current account is a country's broadest measure of foreign transactions encompassing trade, profit remittances, interest payments and other items.
So far this year, the country has accumulated a current account gap of $43.478 billion, well above the $25.244 billion posted in the same period a year ago.
That widening gap also helps explain the Brazilian currency's sharp depreciation over the last few months, which was exacerbated by expectations of a scale back in U.S. monetary stimulus that triggered an exodus of capital from emerging-market nations.
Although foreign direct investment BRFDI=ECI in the country jumped to $7.17 billion in June from $3.88 billion in May, it will still fall short of what is needed to cover the current account gap this year. In the first six months of the 2013, the country received $30 billion in FDI.
Last month, the central bank revised up its current account deficit estimate for the year to $75 billion, acknowledging for the first time in years that FDI is unlikely to cover that gap. The bank expects FDI to reach $65 billion in 2013.
Still, the central bank has said other dollar inflows will easily help cover the remaining deficit.
In the 12 months through June, the current account deficit was equivalent to 3.17 percent of gross domestic product, down from 3.2 percent in May.
A fall in the price of some Brazilian exports plus a hefty bill for imported fuel has led Brazil to accumulate a trade deficit of nearly $3 billion this year.
(Reporting by Alonso Soto and Luciana Otoni; Editing by Maureen Bavdek)
By Claire Ruckin and Arno Schuetze
LONDON, July 23 (Reuters) - The sale of Austrian refrigeration manufacturer AHT Cooling, owned by Quadriga Capital, has attracted interest from a clutch of bidders, with private equity firms Bridgepoint and EQT having made it through to the second round, banking sources said.
Quadriga acquired AHT in 2007 backed with 225 million euros ($296.85 million) of debt, according to Thomson Reuters LPC.
It now wants to sell the company, which has a price tag of around 500 million euros ($659.67 million), and has hired Macquarie and William Blair as advisers. ID:nL5N0F23W5
Private equity firms Bridgepoint BRDG.UL , EQT and Ontario Teachers are among the handful of potential buyers that have made it through to the second round of an auction process in mid-August after first round bids were submitted in mid-July. Trade buyers have also expressed an interest in the company, bankers said.
Other private equity firms that have been close to the process include IK Investment Partners and TPG, bankers added.
All of the potential private equity buyers either declined to comment or were not immediately available to comment. Quadriga was not immediately available to comment.
"A couple of companies have expressed interest in buying AHT Cooling Systems," AHT's Chief Executive Hans Aage Joergensen recently told Reuters.
Bankers are arranging debt packages of around 350 million euros that will include a mixture of senior leveraged loans and subordinated debt, to be offered to potential buyers to help fund a buyout, bankers said.
Rottenmann-headquartered AHT traces its roots back to a 15th century iron manufacturer and specialises in commercial retail refrigeration units for supermarkets.
The company, which was listed on the Austrian stock exchange from 1998 to 2003, posted sales of 292 million euros in 2012 and employs 1100 people, according to the company. AHT's CEO said the company is profitable, declining to be more specific. ($1 = 0.7580 euros)
(Editing by Louise Heavens)
LONDON, July 23 (Reuters) - Banks active in sterling wholesale markets showed a strong preference in May for secured overnight lending and borrowing rather than unsecured or longer-term deals, in a sign of persistent risk aversion.
According to the Bank of England's twice-yearly Sterling Money Market Survey out on Tuesday, secured transactions made up 69 percent of the overall money market and activity was heavily concentrated at overnight maturities.
Lending at maturities of three months to one year accounted for just 2 percent of all secured lending and 3 percent of unsecured transactions, broadly in line with previous findings.
"The total value of reported transactions and conditions in the sterling money market were broadly unchanged relative to the previous survey in November 2012," the central bank said.
"Perceptions of the functioning of the unsecured sterling money market improved slightly, but remained significantly less positive that those of the secured market."
Almost 40 commercial banks, building societies and investment banks active in the sterling money market took part in the poll, which was first conducted in May 2011.
For the complete survey, click http://www.bankofengland.co.uk/publi...mms20132h1.pdf
(Reporting by Olesya Dmitracova; Editing by John Stonestreet)
July 23 (Reuters) - The proposed treatment of Detroit's general obligation bonds in the city's recent bankruptcy filing could lead to new distinctions between debt with limited and unlimited tax pledges, Fitch Ratings said on Tuesday.
A proposal by Detroit's state-appointed emergency manager lumps some unlimited-tax, voter-approved GO bonds with limited-tax GO debt and other debt labeled as unsecured, according to the rating agency, which said that treatment is at odds with its prior expectations.
"If it is confirmed in bankruptcy, it will lead the agency to rethink the distinctions made between tax-supported ratings within Michigan and perhaps nationally," Fitch said in a statement.
(Reporting by Karen Pierog; Editing Tiziana Barghini and James Dalgleish)
Market Review – Fundamental Perspective - 24 July 2013
Last edited by PCMNewsdesk; 07-24-2013 at 10:58 AM.
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* Dollar falls broadly, dollar index close to 1-month low
* Traders cautious before Fed policy meeting next week
* Euro close to 5-week peak versus dollar
By Jessica Mortimer
LONDON, July 26 (Reuters) - The dollar fell to a five-week low against a basket of major currencies on caution about the possibility of the Federal Reserve delivering a downbeat message after its policy meeting next week.
Traders said a Wall Street Journal report that the U.S. central bank may debate changing its forward guidance to emphasise that it will keep rates low for a long time prompted investors to trim bets on the dollar gaining.
The dollar index .DXY fell 0.5 percent to 81.579, its lowest since June 20. Chart support stood at 81.50 - its 200-day moving average and the 76.4 percent retracement of its June to early July rally.
The latest falls caused the dollar to resume a slide that began on July 10, when minutes of the Fed's June meeting gave investors second thoughts about when the bank would start reducing stimulus. The Fed's two-day meeting ends on Wednesday.
"We could see more squaring of long dollar positions keeping the downward pressure on the dollar ahead of the FOMC meeting next week," said Niels Christensen, currency strategist at Nordea in Copenhagen.
He said investors were still long of dollars, particularly against the yen and emerging market currencies.
The euro EUR= rose to a five-week peak of $1.32975, helped by this week's solid euro zone purchasing managers' surveys and German business climate index.
However, the possibility that the Fed will start to scale back asset purchases under its quantitative easing programme soon, perhaps as early as September, could limit dollar losses.
Firmer U.S. data could quickly encourage market players to buy the dollar again, Christensen said.
The dollar fell 0.8 percent to a two-week low of 98.485 yen
JPY= , close to chart support at the July 11 low of 98.20 yen.
"It seems like the Fed is raising the bar on a future rate hike. For the moment, the dollar is likely to trade in its recent range until there is a clear signal from the Fed," said Katsunori Kitakura, associate general manager of the market making unit at Sumitomo Mitsui Trust Bank in Tokyo.
(Additional reporting by Hideyuki Sano in Tokyo, editing by Nigel Stephenson)