Euro edges higher supported by heightened risk appetite

  • The euro got stronger today supported by a heightened risk appetite, after data surprised the market showing a significant decrease in the US Jobless Claims. Successful bond auctions in Portugal and Spain and talks of an increased euro zone safety-net fund raised investors' hopes about the euro zone problematic debt situation. The single currency broke above the 1.35 level versus the US dollar for the third straight day on Friday hitting a high at 1.3531. Speculators expect the euro to rise higher as it moves towards Wednesday's high at 1.3537.
  • The Australian dollar ticked higher against the US dollar after a big drop on Thursday following the better than expected US Jobless Claims. Data showing a stronger-than-expected growth in China further weighed on the Aussie. Accelerated growth in China indicates further tightening measures in China, which, in turn, will hurt demand for Australia's commodities. The Aussie fell as low as 0.9830 versus the dollar yesterday but today it edged higher helped by an improved risk sentiment to trade at 0.9890.
  • Against the Japanese Yen, the dollar gained more than 1% and rallied to an intraday high at 83.11 yesterday from 82.09. The pair lost some of its gains and was last traded at 82.76. Sterling was also hurt by a stronger dollar on Thursday and fell to 1.5835 dollars from 1.6008. Today, sterling gains back some of its losses to trade around 1.5920 ahead of the December retail sales in the UK.
  • Gold plummeted on Thursday weighed by a stronger dollar as well as low risk aversion in the currency markets. Lower demand for the precious metal pushed it as low as 1343.13 dollars an ounce from 1371.03. Today it edged slightly higher and was last traded at 1347.93.     

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3420 with a preference to enter into Long positions at 1.3430
  • § The USDJPY pivot point is at 82.65 with a preference to enter Long positions at 82.75    

Today's calendar and market movers:

  • § Germany's IFO- Business Climate is forecasted to rise to 110
  • § UK Retail Sales in December is forecasted to drop 0.1%

Equity Markets:

US equities closed negative on Thursday with the S&P500 traded down 0.13% and the DJIA unchanged. The European bourses are also negative with the FTSE trading down 1.82%, the DAX trading down 0.83% and the CAC down 0.30%. The NIKKEI and the HSI at the time of writing are trading down 1.56% and down 0.53% respectively.

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