Fed Chairman Bernanke's comments boosted the equity markets.
- Ben Bernanke said that the recession in the US is probably over from a technical perspective; however, growth will remain weak for some time due to increased unemployment. The rise in US stock market was also due to a combination of better than expected economic data and Warren Buffet stating that his firm, Berkshire Hathaway, is buying equities.
- Stronger than expected economic data from the US and UK helped risk appetite, especially the US retail sales that posted a 1.2% gain, three times greater the expected forecasted figure.
- Asian stocks rise following an optimistic US session, giving way to the largest gain in three weeks for the MSCI Asia Pacific Index. As more signs point to a global economic recovery, investors continued to sell-off the USD and buying higher yielding assets.
- At this rate the greenback is on its way to replacing the yen in the carry trade. The Japanese yen strengthened against the USD to just below 90.80 during the Asian session as Japan's new Prime Minister, Yukio Hatayama prepares to take office later in the day.
Currency to watch out for: EURUSD & GBPUSD
- The EURUSD is just 6 pips below a massive level at 1.4700 as of 06:15 GMT. Today's intraday pivot point for the pair is at 1.4600 with a preference to enter into long positions at 1.4610.
- The GBPUSD pivot point is at 1.6525 with a preference to enter into short positions at 1.6515.
Today's calendar and market movers:
- UK Unemployment Rate expected to rise to 7.9%
- EU Core CPI year on year expected to drop to 1.2%
- US Core CPI month on month expected to remain unchanged at 0.1%
- US Industrial Production month on month expected to rise to 0.6%
- US Crude Oil Inventories expected to rise to -2.6 million barrels from -5.9 million
Now onto Stocks:
- US stocks rose on Tuesday to 2009 highs with the Dow up 0.6%, the S&P up 0.3% and the NASDAQ up 0.5%
- As of 06:20 GMT the Nikkei is trading at 0.52% and the Hang Seng at 1.75%