Euro falls ahead of euro zone policymakers meeting

  • The euro edged lower on Monday ahead of a euro zone finance ministers meeting to discuss an increase in the euro zone rescue fund. After the euro hit a one month high versus the dollar last week investors anticipate decisive steps and measures by the euro zone policymakers in order to push it higher towards the 1.35 level. ECB president Jean Claude-Trichet supports an increase in the effective lending capacity of the safety-net fund but question remains whether Germany will agree weighing on the single currency.
  • The euro fell to 1.3291 from 1.3401 against the dollar. Trading is expected to be volatile due to thin trading as the US celebrates Martin L. King's Birthday.
  • The Australian dollar slid today resuming its downward direction against the US dollar after China announced on Friday that it will raise the bank's required reserve requirements. China is Australia's largest trade partner and tightened measures in China's monetary policy will hurt the demand for Australia's commodities. Floods in Queensland continue hurting Australia's coal exports further weighing on the Aussie. Against the US dollar, the Aussie fell to 0.9861 from 0.9985 traded on Friday before the news.
  • Gold ticked lower today weighed by China's tightening measures that can affect demand for the precious metal. Gold fell from 1365.48 as low as 1360.80 dollars an ounce.

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3390 with a preference to enter into Short positions at 1.3380
  • § The USDJPY pivot point is at 82.65 with a preference to enter Long positions at 82.75               

Today's calendar and market movers:

  • § Foreign investment in Canadian Securities in November is forecasted to fall to 9.50B
  • § US market is closed due to Martin L. King's Birthday

Equity Markets:

US equities closed positive on Friday with the S&P500 traded up 0.74% and the DJIA up 0.47%. The European bourses are mixed with the FTSE trading down 0.36%, the DAX trading up 0.01% and the CAC up 0.21%. The NIKKEI and the HSI at the time of writing are trading up 0.04% and down 0.53% respectively.

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