The Euro and others gained against the US Dollar today as risk-on trades performed well. For the Euro, a Greek auction of €1.625 billion in 26-week T-bills was well received, netting a yield of 4.65%. That is below the 5% that Greece can borrow from the EU/IMF, and as a result was taken as a positive sign. It was enough to shake off a downgrade of Portugal's credit rating to A-, two notches lower from Moody's.

The second factor here was strong performance in European stock markets which carried over into a big jump in US stocks at the NY open. It's the beginning of earnings season and Alcoa was the first of the Dow components to release its 2nd quarter earnings. The results were better-than-expected as the aluminum giant reported a $136 million profit on stronger-than-anticipated 22% revenue growth. The news helped the Dow Jones rally with the main 3 US indexes jumping out to gains above 1%.

In currency markets, risk-on trades had been performing strongly prior to the NY open as the main European indexes were up more than 1.5% as of 10 AM ET helping to boost risk appetite. The Euro, Pound, Australian Dollar and Canadian Dollars - all sensitive to risk sentiment rose against the US Dollar.

With stocks pointing north, European traders brushed off a weaker German ZEW economic sentiment, which showed another month of dropping confidence from German investors. In North America both the US and Canada posted wider-than-expected trade gaps, but with both countries showing higher exports and imports (not driven by higher energy imports) it showed that consumers and manufacteres in those countries had a strong May.