Euro still strong in the beginning of a new week
- The euro's upward rally continues as investors appear more confident over the euro zone sovereign debt situation. The single currency rose as high as 1.3645 against the US dollar today as investors' demand for the euro increased to its highest in two months. The pair was last traded at 1.3591 dollars. Hopes that the euro zone policymakers will take decisive steps in defending the euro and talks of an increase in the bailout fund, added strength in the euro. Also, ECB President Jean Claude Trichet's comments on the euro zone increased optimism on the euro. Further supporting the euro, is the fact that Japan and China expressed their willingness to step in and help the single currency. Today, the currency market is focusing on Europe's Purchasing Manager Index and Industrial New Orders data.
- The Australian dollar fell against the dollar during the Asian session as the Purchasing Manager Index failed to meet expectations. The Aussie fell as low as 0.9864 versus the dollar but then recovered some of its losses in the EU session to trade at 0.9893. Investors now anticipate tomorrow's Consumer Price Index and expect an increase of 0.8%.
- Against the Japanese Yen, the euro extends its gains after it hit a two month high at 112.70. The pair was last traded at 112.46. The euro also hit a two week high at 0.8529 against a weaker sterling after poor retail sales data in the UK disappointed investors. The pair eased its rally today to trade around 0.85.
- Gold jumped on Monday after it plummeted for two straight days. Gold prices rose as high as 1353.05 from 1337.55 as a weaker US dollar raises demand for the precious metal.
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3540 with a preference to enter into Long positions at 1.3550
- § The USDJPY pivot point is at 82.50 with a preference to enter Long positions at 82.55
Today's calendar and market movers:
- § Europe Purchasing Manager Index Manufacturing in January is forecasted to remain unchanged
- § Europe Industrial New Orders in November is forecasted to gain 2.3%
US equities closed positive on Friday with the S&P500 traded up 0.24% and the DJIA traded up 0.41%. The European bourses are also positive with the FTSE trading up 0.48%, the DAX trading up 0.54% and the CAC up 1.33%. The NIKKEI and the HSI at the time of writing are trading up 0.69% and down 0.34% respectively.
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