This is a review of the elements likely to affect foreign exchange (forex) trading in Europe:

Main headlines

Spain to pass reforms, budget cuts with eye on aid - Reuters

Chinese Industrial Profits Fall 6.2% in Fifth Straight Drop - Bloomberg

IMF, EU clash over Greece's bailout prospects - Reuters

QE3 triggers fear of new currency wars - FT

Bill Gross: We're Buying What the Fed and ECB Are Buying - CNBC

Americas wrap-up

Fed's Evans Calls for More Easing, Warns of 'Lost Decade' - Bloomberg

Orders for US Durable Goods Probably Slumped on Airplanes - Bloomberg

Sales of New US Homes Hover Near a Two-Year High - Bloomberg

Corporate America sweats as US nears fiscal cliff - Reuters

Brazil Real Falls on Report of Possible Government Intervention - Bloomberg

Chilean Peso Declines as Copper Drops on Global Stimulus Concern - Bloomberg

Santander unit rises in Mexico debut - FT

Asia-Pacific summary

Asian Stocks Rise on China Stimulus Measures Prospects - Bloomberg

China Central Bank Makes Record Weekly Cash Injection - CNBC

Japan Won't Compromise With China on Claim to Islands: Noda - Bloomberg

Korean Manufacturer Confidence Holds Near Three-Year Low - Bloomberg

Singapore to Take Expats at 'Comfortable' Pace - Bloomberg

India's Land Acquisition Bill Gets More Business Friendly - WSJ

Singh Policy Steps Augur Bumper Budget With Eye on Vote - Bloomberg

Indonesia's Robust Demand to Lift Inflation Rate, OECD Says - Bloomberg

US to ease Myanmar import ban - FT

Aussie Rises From 2-Week Low on China Stimulus Prospects - Bloomberg

European news

Euro Zone Misery to Last for Decade: Ernst & Young - CNBC

European law makers warn of banking union split - Reuters

EU companies write off €76bn of goodwill - FT

Madrid Protesters March Again as Spain Braces for Cuts - Bloomberg

Rajoy fights growing Spanish turmoil - FT

Here Are Reasons Not to Lose Faith in Spain... Yet - CNBC

Tens of Thousands in Athens Protest Cuts - WSJ

Germany Still Outperforming Most of Euro Zone - WSJ

Irish house prices post largest monthly rise since 2007 - Reuters

Euro Can Bear Fewer Members as Czech Leader Calls Greeks Victims - Bloomberg

Jacques de Larosière Seductive simplicity of ringfencing - FT

FOREX action

EUR: The main euro cross-rates edge higher while they keep their recent consolidating bias. Spain's economic and political problems continue to grab the headlines. Madrid will release today the 2013 budget bill; stronger fiscal retrenchment is expected. Its European peers are demanding Rajoy vows to commit to fiscal consolidation and new structural reforms as a prerequisite to launch the sovereign bail-out. EUR-USD steadies towards 1.2900 after stopping close to the 200-day moving average.

GBP: The sterling crosses move in synch with the euro ones. Today, market participants will pay close attention to the latest estimate of Q2 GDP figures in the UK. Cable trades below 1.6200, while GBP-JPY is a tad under 125.80. EUR-GBP is pivoting in the 0.7960 area.

CHF: The Swiss franc moves forward against the greenback and sideways versus the common currency. Yesterday, USD-CHF was able to break the resistance found at 0.9400 but it is now under that threshold. Meanwhile, EUR-CHF is still trading below but close to 1.2100. We see little safe-haven demand related to the Swiss franc.

Nordics: In the last few days we have witnessed how the Swedish krona is trailing behind the Norwegian kroner. The SEK is quite weak against the euro and the dollar. The NOK seems to be more supported by the strength of oil prices. November future contract of the Brent barrel holds above $110.

USD & JPY: The US dollar and the Japanese yen give some of their recent gains prompted by the flight to quality. USD-JPY is still trading below 78.00. A breakthrough the 77.50 area could pave the way to BOJ intervention.

CAD, AUD & NZD: The three dollars climb back from the red lead by the aussie. According to some sources China's Central Bank has conducted a record weekly injection to cash-strapped banks. PIMCO sees Chinese GDP growth at 6.5-7.0% over the next 12 months.

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