Dollar appears weaker days before 2011

  •  The euro edged higher on Tuesday's trading session following the squaring of short euro positions before the year end. Thin trading conditions pushed the single currency higher rising as high as 1.3254 versus the dollar above the 1.32 level from 1.3072 traded on Monday.  
  •  The US dollar appears weaker on Tuesday against a basket of currencies and US Treasury yields fell on Monday weighing on the greenback. Against the Japanese Yen, the dollar fell to a three week low at 82.39 yen after data from Japan revealed an increased factory output and the manufacturing sector is expected to strengthen in the following months.
  •  The Australian dollar recovered losses on Tuesday rising to a seven-week high versus the US dollar after investors speculate that monetary tightening in China will not affect the demand for raw materials and commodities. The Aussie plummeted initially after China raised interest rates by 25 basis points on Christmas and said that more prudent measures will follow in the near future. But Australia's positive economic outlook with low unemployment, rising commodity prices and expectations of another rate hike in mid-2011 supports the Aussie towards record highs. The Aussie hit 1.0089 versus the US dollar today from 0.9994 traded yesterday and towards a record high hit in early November at 1.0182 dollars
  •  Gold rallied today supported by a weak dollar as the precious metal becomes cheaper for investors outside the United States. Gold rose as high as 1391.52 an ounce from 1372.40 an ounce traded yesterday. 

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3185 with a preference to enter into Long positions at 1.3185
  • § The USDJPY pivot point is at 82.80 with a preference to enter Short positions at 82.80               

Today's calendar and market movers:

  • § US Consumer Confidence in December is forecasted to rise to 56.3
  • § US Fed Manufacturing Index in December is forecasted to rise to 11

Equity Markets:

US equities were mixed on Monday with the S&P500 up 0.06% and the DJIA down 0.16%. The European bourses are trading positive with the FTSE unchanged, the DAX and the CAC traded down 1.23% and 0.98% respectively. The NIKKEI and the HSI at the time of writing is trading down 0.61% and 1.05% respectively.

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