The dollar headed for a weekly loss against the euro on speculation Europe's central bank will keep its interest-rate at 4% and might even increase while the U.S. economy loses jobs. The EUR/USD is currently trading at $1.5601 as of 7:40 am, GMT The currency fell from a four-week high versus the euro yesterday after European Central Bank President Jean-Claude Trichet said a rate increase in July is 'possible.' A government report will probably show the U.S. lost jobs for a fifth consecutive month. The yen headed for a second weekly decline as stocks rallied, prompting investors to add to holdings of higher-yielding assets funded with Japan's currency. The USD/JPY is currently at 106.12 as of 7:42 am, GMT.

The pound fell against the euro for a third day as the U.K. currency dropped to 79.67 pence per euro as of 7:50 am, GMT, from 79.63 pence yesterday. Against the dollar, it was little changed at $1.9557 after the country's biggest mortgage lender HBOS Plc revealed British house prices fell more than expected, 2.4 percent on the last month. The data provided further evidence that the housing market is slowing down and policy makers are facing a growing dilemma, trying to balance slowing growth with rising inflation. The Bank of England is expected to maintain interest rates steady at 5 percent later today. However, it can surprise investors, since it has been cutting 25 basis points every quarter, what would support the Pound's slump.

Australia's dollar headed for a weekly gain on prospects its central bank will raise interest rates. The Aussie dollar climbed to near a 25-year high after a government report this week showed Australia's economy grew twice as fast as economists forecast last quarter. 'The strong Australian data this week such as the gross domestic product report may force the Reserve Bank of Australia's hand to hike rates,' said Lee Wai Tuck, a currency strategist at Forecast Pte Ltd. in Singapore. 'All of this data is supporting the Aussie.' AUD/USD currently trading at 0.9584 as of 7:55 am, GMT.

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