(RTTNews) - The dollar was steady Thursday morning, after German lawmakers approved a resolution to increase the lending capacity of the European Financial Stability Facility by an unexpectedly overwhelming margin.
The Bundestag approval paves way for raising Germany's contribution to the EFSF from EUR 123 billion to EUR 211 billion.
The proposals, as agreed by European leaders on July 21, include boosting the powers of the EFSF, equipping it with more policy tools and increasing the fund's lending volume to EUR 440 billion from EUR 240 billion.
Greek officials were in Germany this week pleading for the rescue funds. They vowed to follow through with austerity measures and yesterday the Greek government passed unpopular property taxes in an effort to balance their budget.
Despite the moves to quell Europe's sovereign debt crisis, the dollar was only marginally weaker against the euro, easing slightly to $1.3625. The buck started the week at an 8-month peak near $1.34.
There was little movement near $1.5650 versus the sterling. A week ago the dollar hit a yearly high of $1.5327.
The dollar remained locked in a stalemate near Y76.50 versus the yen, having touched a record low 75.94 back in August.
At 8:30 am ET, the Labor Department is due to release its customary jobless claims report for the week ended October 1st at 8:30 AM ET. Economists expect claims to have slipped to 420,000 from 423,000 reported for the previous week.
Data on pending home sales is due out at 10 AM ET. The index is expected to have declined by 2 percent in August, adding to the 1.3 percent drop of the previous month.
The Bureau of Economic Analysis is due to release its final estimate of second quarter GDP at 8:30 am ET. Economists expect GDP growth to be upwardly revised to 1.2 percent.
Philadelphia Federal Reserve Bank President Charles Plosser will speech on the economy to business leaders at Villanova University around the same time.
A confidential letter sent to Italian Prime Minister Silvio Berlusconi by European Central Bank President Jean-Claude Trichet and Bank of Italy Governor Mario Draghi in August recommended heavy reforms to balance the country's budget, an Italian newspaper reports.
The letter, published by Italian daily Corriere della Sera on Thursday, suggested radical economic reforms in the fields of labor law and pensions. The letter urged Italy to balance its budget by 2013, a year earlier than originally planned.
