Following a New York session that saw risk appetite explode, currencies were content to remain at those elevated levels in a lethargic trading session. With all of the news of late being that of the positive variety, most of the recent dour issues that have been looming were put to the back burner. US Q2 earnings have taken off better than anticipated sending equities soaring globally. This, coupled with a successful 1.625 Billion Euro Greek debt auction has resulted in traders stepping over each other to get back involved with higher yielding, riskier assets. Moody’s downgrade of Portugal yesterday, which the markets widely expected, was generally brushed aside after the initial knee jerk reaction. However, a good deal of credence seemed to be placed on Greece’s first debt auction since taking the combined EU/IMF bailout almost two months ago. The auction’s yield of 4.65% came in below the 5% yield which Greece borrowed its funds from the bailout plan, thus helping to ignite Euro moves overnight.

After tapping a two month apex of 1.2737 earlier in New York, the EUR/USD pair remained between 1.2700 and the NY high which remained a firm resistance level heading into the London session. Asian equities followed the Wall Street lead with Japans Nikkei 225 up over 2.5% and Australian ASX/S&P higher by over 1.5% on the day. With stocks higher, the yen crosses took the hint, with the GBP/JPY pushing over 135.50, the EUR/JPY capping 113.25, and the AUD/JPY rising over 78.80 on the day. The session’s highs represent 24 hour moves of over two big figures in the above listed crosses. USD/JPY visited the area north of 89.00, posting an 89.10 high on today’s trading.

As is usually the case in a climate of risk taking, the Aussie dollar was firm, posting highs just shy of 0.8850. The Australian currency has had a stellar month of July so far, today’s high being the culmination of a 765 pip move higher since the first of the month.

Ahead in London, we have important UK unemployment data followed later in New York by US Retail Sales due at 12:30GMT with a forecast of -0.2%. This data should be a good barometer of how rough the road ahead will be for the US economy after disappointing results over the past two weeks with payroll and ISM data. Regardless, the data would have to be pretty bad in order to slow the current run of risk.