The euro rose to 1.3376 against the US dollar at the start of the new week as risk appetite got a boost by surprisingly strong Chinese factory data. The upbeat PMI figures eased concerns about an economic slowdown in one of the world’s largest economies. The pair rose to 1.3376 from 1.3309. Today, Asian shares turned positive on risk appetite as EU finance ministers decided to raise the ceiling of the lending power of ESM and EFSM to 800 billion euro. On Friday, Spain unveiled a new austerity package which aims to bring down the country’s budget deficit but there are doubts whether these proposed saving measures will actually be obtained. Eyes now turn to the eurozone unemployment rate.

The US dollar weakened against a basket of currencies as heightened risk appetite in the market spurred a lower demand for safe haven currencies. Versus the Japanese yen, the greenback jumped as high as 83.30 from 81.85 traded on Friday and all eyes now turn to the Bank of Japan and whether they will decide on more quantitative easing at their next monetary policy. The yen was weighed by a Bank of Japan report which showed that sentiment failed to improve at the country’s biggest companies. Investors are now focusing on this week’s Non Farm Payrolls data which may reveal whether the US economy continues to recover. The US ISM Manufacturing is also expected later today.

The Australian dollar jumped versus the US dollar to 1.0470 from 1.0344. The Aussie was supported by the better than expected PMI data from China as signs of improvement in Australia’s largest trade partner improved sentiment.

Oil rose to 104.11 dollars a barrel but later dipped to 102.61. Gold rose to 1674.45 dollars an ounce from 1659.62. Gold edged higher to 1252.58 euro an ounce from 1249.19. Silver jumped to 32.56 dollars an ounce from 32.15. Stay in tune throughout the day with !

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Outlook.PivotPreference1Sentiment2
.EURUSD1.3310LONG @ 1.332033% of deals buy EUR
.USDJPY82.75LONG @ 82.8046% of deals buy USD
.GBPUSD1.5960LONG @ 1.597028% of deals buy GBP
.AUDUSD1.0365LONG @ 1.037062% of deals buy AUD
.GOLD1663.00LONG @ 1663.0074% of deals buy GOLD
.OIL104.50LONG @ 105.7085% of deals buy OIL
1 data generated by Trading Central, 2 data obtained from easy-forex Inside Viewer
CalendarCurrencyTime (GMT)EventForecast
.EUR07:30German Flash Manufacturing PMI50.0
.EUR08:00Eurozone Flash Manufacturing PMI48.1
.EUR09:00Eurozone Industrial New Orders for August0.1%
Movers Shakers
NZDUSD
The British Pound (GBP) produced a spectacular rebound against the Australian dollar (AUD) rising as high as 1.5476 on Friday. The pair appreciated by 381 pips, and thus recorded a weekly return of 2.5%. Friday’s close was at 1.5337, and the next resistance level is at 1.5477. The pair slid today to 1.5290 and what is interesting to see is whether there will be a reversal of the trend.