• Euro edged higher supported by heightened risk appetite

    Euro edged higher on Thursday for the fourth straight day ahead of the Spanish and Italian bond auction later today. A successful debt auction in Portugal a day before lowered the yields and calmed the markets helping the single currency touch a one week high at 1.3143 against the dollar. The single currency was last traded at 1.3128 versus the dollar. The European Central Bank and the Bank of England will reveal their interest rate decision today.
  • Euro is supported by talks that the euro zone finance ministers will raise the rescue funds available for the euro zone countries for the possibility of seeking financial help. A significant increase in the rescue funds eases investors' debt contagion fears but eyes turn on today's European Central Bank's meeting and possible steps for helping euro zone's periphery bond auctions. Euro is also supported by talks that China and Japan will help euro zone through its debt crisis helping the euro trade above the 1.31 level.
  • Dollar edged lower today suffering four day losses weighed by a heightened risk appetite in the currency markets. Retail Sales are expected on Friday that can give further signs of a sustained recovery in the world's largest economy.  Against the Japanese Yen, the dollar slid on Thursday falling as low as 82.93 from 83.13 and speculation expects it to retest yesterday's low at 82.80. The dollar rallied against the Swiss franc as demand for the safe haven franc lowered rising as high as 0.9747dollars from 0.9660
  • The Australian dollar fell versus the US dollar after jobs data showed employment in December improved less than expectations. The Aussie fell to 0.9914 dollars after the data from 0.9964 dollars, however the poor employment growth is mainly due to less people looking for employment. 
  • Gold edged slightly lower today as a higher risk appetite reduces demand for the precious metal. The safe haven metal was last trading at 1385 dollars an ounce from 1388.88 dollars an ounce.

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3155 with a preference to enter into Short positions at 1.3145
  • § The USDJPY pivot point is at 83.90 with a preference to enter Long positions at 83.95

Today's calendar and market movers:

  • § UK's interest rate decision is forecasted at 0.5%
  • § Europe's interest rate decision is forecasted at 1%
  • § US Initial Jobless Claims is forecasted to drop at 402K

Equity Markets:

US equities closed positive on Wednesday with the S&P500 traded up 0.90% and the DJIA up 0.72%. The European bourses are also trading positive with the FTSE trading up 0.61%, the DAX trading up 1.83% and the CAC up 2.15%. The NIKKEI and the HSI at the time of writing are trading up 0.73% and up 0.58% respectively.

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