Euro slipped on a weak manufacturing data even as the flight to the risk supported the currency and kept the losses minimal. The single currency was also pepped up on ideas China could provide loans to Greece to fund government bond buybacks in the secondary market to help cut the country's debt burden. Meanwhile, yesterday, US leaders approved an agreement to increase debt ceiling by $2.1 trillion and cut the federal budget deficit by as much as $2.5 trillion over a decade. US President Barack Obama said the deal will cut about $US1 trillion in spending over 10 years and avoid the nation's first ever default, which would have had a devastating effect on the US economy and global markets. The US deal still needs to be approved by Congress and includes the establishment of a bipartisan committee of Congress to report back by November, with a proposal to further reduce the US deficit. The Eurozone manufacturing recovery lost further momentum in July. The final Markit Eurozone Manufacturing PMI fell to 50.4, below June's 52.0 and the weakest reading since the recovery began in October 2009. The level of the headline PMI was in line with the earlier flash estimate. The slowdown was broad-based, with almost all of the national PMI indices coming in lower than their respective June levels. Euro slipped after the data and traced back towards 1.4400 levels against the US dollar though the equities in Asia and Europe stayed firmly in the positive mode. The movement in the currency markets are likely to be mixed in the near term with traders contemplating a possible reversal of positions in favor of the US currency in case the official talks indicate that the debt ceiling impasse is over at least for now. Decelerating global growth could mean that more and more investors could flock to the safety of the US currency.

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