The US dollar is trading weaker against commodity linked currencies today as investors moved back into riskier territories. Strong employment data from Australia boosted investors' confidence in riskier assets, therefore weakening the dollar considerably against the Australian and Canadian dollars. Despite its weakness, the dollar is still trading at a higher level against the euro as Eurozone budget crises continues.
U.S. initial jobless claims report came out better-than-expected and fell 440,000 during the last week. Positive jobless claims supported investor's optimistic outlook on the economy. Meanwhile, US Retail Sales report will be out tomorrow and will set the tone for further direction of the dollar.
The euro weakened against all majors today after European Union summit offered limited measures to Greece's budget deficit. The much anticipated EU summit yielded few details in the bailout plan, causing investors to be increasingly worried over the state of Greece and its peripheral countries. Currently, the euro is trading at the lowest level since May of last year, falling close to one percent against the US dollar. As Greece's crises continue, investors are pessimistic about the outlook of the euro, which indicates that the downward trend for the euro may continue.
It is a calm day for the British pound, as it awaits Wednesday's inflation report from the Bank of England. Currently, the pound is trading slightly higher verses the dollar, and much stronger than the euro at a 1.1 percent appreciation. With little economic data out this week, the pound will likely stay range bound until next week.
The Japanese yen moved higher against the US dollar, and weakened against the Australian and New Zealand dollars today as risk appetite revives. Japan's consumer confidence report will be out tomorrow and will give investors a better idea of the direction the yen is going.
The Canadian dollar continued its gains for the third consecutive day on demands for riskier assets and currencies. As a commodity linked currency, the Canadian dollar appreciated alongside crude oil, currently reaching $75 a barrel. An increase of 0.4 percent in new home prices for December also supported the Canadian dollar.
The Australian and New Zealand dollars advanced against all major currencies as risk appetite grew. Despite continuing deficit issues from the Eurozone, global economic data shows positive sentiments, supporting riskier assets and currencies such as the Australian and New Zealand dollars. Australian employment data revealed an increase of 52,700 jobs last month, three times as many jobs as economists forecasted. Positive growth data in the Asia Pacific region suggests that further economic recovery should likely support the AUD and NZD in the positive territory throughout next quarter.
10-Year Treasury Note Yield: 3.7303%
Dow Jones Industrial Average: 10131.34 + 92.13