Euro bounces on China's supporting words
- Euro edged higher on Tuesday's currency markets moving away from two and a half week low versus the US dollar. The single currency bounced after China's vice premier commented on the euro zone debt crisis saying that China supports Europe's efforts to prevent a euro zone debt contagion and agrees with the measures taken by the European Union. On Monday the euro plummeted due to rising tensions in Korea and after France revealed to face sovereign debt problems fuelling concerns over the euro zone fiscal crisis.
- The euro climbed as high as 1.3200 against the dollar today from 1.3093 hit on Monday. Against the Swiss franc, the euro fell to record low levels hitting 1.2638 on Monday and the single currency also fell against the Japanese Yen on Monday to 109.58 but recovered some of its losses on Tuesday rising to 110.48.
- Against the Japanese Yen, the dollar edged slightly lower on Tuesday after the Bank of Japan decision to keep interest rates unchanged at 0.1 percent.
- Higher commodity prices and the euro bounce pulled the Australian dollar higher versus the US dollar on Tuesday. The Aussie rose as high as 0.9972 against the greenback further near parity level. Reserve Bank of Australia minutes released today showed that no monetary tightening will take place in the near future as household consumption and borrowing remained restrained and, in addition, savings have increased significantly raising no inflationary concerns.
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3230 with a preference to enter into Short positions at 1.3220
- § The USDJPY pivot point is at 83.90 with a preference to enter Short positions at 83.85
Today's calendar and market movers:
- § Germany's Consumer Confidence in January is forecasted at 5.7
- § Canada's Consumer Price Index in November is forecasted at 0.3%
- § Canada's Retail Sales in October is forecasted at 0.5%
US equities were mixed on Monday with the S&P500 up 0.25% and the DJIA down 0.12%. The European bourses edged positive with the FTSE traded up 0.34% and the DAX and the CAC traded up 0.52% and -0.46% respectively. The NIKKEI and the HSI at the time of writing are trading up 1.51% and 1.18% respectively.