Euro plummets weighed by Korean tensions

  • The US dollar rose on Monday's European session supported by heightened risk aversion in the currency markets. Tensions in the Korean peninsula became intensified after South Korea planned an artillery firing drill on Monday ignoring North Korea's threats for attack raising demand for the safe haven currency.
  • Euro is under pressure on Monday after rating agency Moody's downgraded Ireland's sovereign debt on Friday raising fears of a euro zone debt contagion. Rising Korean peninsula tensions weighed further on the single currency which hit a two week low versus the US dollar today falling as low as 1.3125 dollars below the 1.32 level.
  • The Aussie rose to 0.9903 versus the dollar and to 1.3282 versus the euro despite the war climate in Korea and falling Asian stocks.
  • Gold edged higher as heightened risk aversion raised demand for the precious metal in an end of year thin and choppy trade. Gold climbed to 1387.95 an ounce.

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3215 with a preference to enter into Short positions at 1.3205
  • § The USDJPY pivot point is at 83.70 with a preference to enter Long positions at 83.75

Today's calendar and market movers

  • § Germany's Producer Price Index in November is forecasted at 0.3%
  • § Europe's Consumer Confidence in December is forecasted to fall at -9.0

Equity Markets:

US equities were mixed on Monday with the S&P500 up at 0.08% and the DJIA down at -0.06%. The European bourses traded down with the FTSE traded at -0.16% the DAX and the CAC traded down -0.60% and -0.54% respectively. The NIKKEI and the HSI at the time of writing is trading down at -0.85% and -0.80% respectively.