The U.S. dollar was mostly softer vs. the majors, up modestly only vs. euro and jpy. The euro made another marginal new high at 1.3029, but was unable to follow through and ended down on the day vs. USD.

Besides the 1.30 area offering stiff resistance, the key level is the post-EFSF high of 1.3094 posted on May 10.

The yen was weaker across the board while the Swiss franc was mixed. EM FX was mixed, with high yielders outperforming. Currencies overall are trading in narrow ranges ahead of European bank stress tests due Friday, which clearly pose some event risk even as more leaks seen.

Biggest gainers on the day vs. USD were AUD, NZD, ZAR, BRL, and CAD, while biggest losers vs. USD were JPY, RON, CZK, INR, and EUR. The BOC hiked by 25 basis points to 0.75%, as expected.

MXN recovered from recent weakness in very choppy trade, but remains vulnerable in the current environment of weak U.S. growth. June U.S. housing starts fell a larger-than-expected 5% month over month in June, but building permits rose a larger than expected 2.1% month over month. The Brazil central bank meeting ends Wednesday, and market split between 50 and 75 basis points.

U.S. equity markets were higher, as the Dow Jones Industrial Average, S&P, and Nasdaq ended up 0.7%, 1.1%, and 1.1%, respectively.

European markets were lower, with Euro Stoxx 50 down 0.3%. Asian equities are likely to open up today as Asian ADRs were higher during N. American trading Tuesday. Nikkei futures point to an up Japan open, and the weaker yen should help Japan exporters. .
A global leader with close to 200 years of experience, Brown Brothers Harriman helps many of the world's most sophisticated mutual funds, investment managers, banks and insurance companies achieve their international business objectives. BBH provides specialist services and innovative solutions to clients that include a global custody network of close to 100 markets, accounting, administration, securities lending, foreign exchange, cash management and brokerage services. BBH operates a global business through 14 locations, including New York, Boston, New Jersey, Philadelphia, Charlotte, Chicago, Dallas, London, Dublin, Luxembourg, Zurich, Grand Cayman, Hong Kong and Tokyo.