The US dollar weakened to a 15-month low across the board, despite the release of positive data out of the U.S.  Initial jobless claims fell below 500,000 coming in at 466,000, while personal consumption rose to 0.7 percent. 

In other news, the Federal Reserve released its minutes from its latest policy meeting stating that policymakers saw the U.S. currency's recent decline as orderly.  The minutes also stated that U.S. interest rates will stay close to zero for most of 2010.  The news spurred investors to seek higher yielding investments overseas.    

The euro rose 0.6 percent, rising to a 15-month high amid speculation that the European Central Bank will add an adjustable interest rate to December's 12-month loans. This would suggest that the ECB is trying to normalize its monetary policy.  Look for the EUR/USD currency pair to continue to hold above 1.50. 

Sterling pared gains after revisions to third quarter UK gross domestic product came in as expected.  The revised data showed the British economy shrank by 0.3 percent in the third quarter compared with the initial estimate of 0.4 percent.      

 

In other news, Bank of England governor King said it would take a long time for the level of output to return to more normal levels and he saw no immediate risk to the UK's triple-A credit rating.   

The Japanese yen pushed higher moving 0.9 percent against the dollar, breaking the key level of 88.00.  Japanese exports continued to improve as the year/year decline fell to -23.2 percent in October from the previous -30.7 percent.  The market will look to see if policymakers in the new government decided to intervene against the strong currency. 

 

The Canadian dollar rose to a one-week high against its U.S. counterpart after the Russian central bank said it planned to invest some of its foreign exchange reserves in the loonie.  With no major data due out, look for the currency to continue to track record gold and strong oil prices.  

The Australian and New Zealand dollars both strengthened against the dollar after bullish comments from Australia's central bank supported speculation that interest rates will rise next month.  Reserve Bank of Australia Deputy Governor Ric Battellino stated that the country's economy had entered into a new sustainable growth phase. 

Indicative rates:

EUR/USD

1.5110

USD/JPY

87.36

GBP/USD

1.6712

USD/CAD

1.0466

USD/MXN

12.8533

USD/CHF

.9975

AUD/USD

0.9310

NZD/USD

0.7318

10-Year Treasury Note Yield:  3.341%

Dow Jones Industrial Average:  10,474.60 +41.19