The bugbears remained in the market early in the European session after an underwhelming Italian long term debt auction following from yesterday's more positive short term auction. They had planned to sell 8.5 billion but managed to sell 7 billion Euros, the ensuing 30 minutes saw the Euro fall to lows of 1.2858 USD. What helped drive the strong gain of the Australian dollar which moved from lows of 1.0045 USD up to 1.0145 earlier this morning was a positive run of releases of US economic data mixed with yesterday's oversold move of the back of the ECB balance sheet of 2.73 trillion Euros. Weekly jobless claims were slightly higher than expected coming in at 381,000 for the week, but capped off the strongest monthly performance in 3 years. Looking back to October where it averaged 400,000 plus claims per week compared to 373,000 average this month , it tops of a solid quarter of US economic performance and leans toward a more bullish 2012 that increasingly the economists are predicting.
The Euro and Pound did not see the gains in comparison to that of the Australian dollar overnight off the back of the US session with further uncertainty expected as we move into 2012. Even if the debt crisis is controlled the Eurozone is still has to look forward to a predicted recession hence the lack of any holiday rallies this year.
Equity markets have resumed today marginally up and for today's currency trade we expect very little to happen with a finish in the range we saw the market open on Monday. As the last few unlucky people working today hopefully you can sneak of early and enjoy this weekend and the New Year.