Positive vibes managed to dominate financial markets on Tuesday amid bets that China will loosen monetary policy after reporting growth at its slowest pace in almost two and a half years and data from the U.S signaled momentum is adding steam in January.

Initially, stocks, the euro and after china's economy grew better than forecasted in the fourth quarter yet, at the weakest pace in 10 quarters, as Europe's debt crisis damped export demand and property market tumbled, driving Premier Wen Jiabao to ease monetary policy.

Figures from the U.S showed that manufacturing in the New York Federal region expanded to 13.48 in January, the strongest pace in nine months, from a revised estimates of 8.19 in the year ended December, adding to signs manufacturing will lead the recovery in 2012.

Optimism was cited in the 17-bloc euro area as well, after Spanish and Greek borrowing costs dropped sharply at auctions today, as traders seem to have brushed aside Standard & Poor's Downgrade to a bunch of debt-trapped euro nations, including France and Austria.

The dollar index, which measures the performance of the U.S dollar against a basket of currencies including the euro, the pound and the Japanese Yen, fell slightly from the opening level of 81.16 to trade around 81.11, recording the highest level at 81.45 while lowest at 80.77.

Accordingly, Gold surged to trade around $1653.5 an ounce, from the opening level of $1644, recording the highest level of 1667.75 and lowest at 1642.98. Oil gained for the second day and currently trades around $100.66 a barrel from the opening levels of $99.65.

The euro rose against the dollar following bond selling optimism, sending the EUR/USD pair to trade around $1.2733 from the opening level of $1.2666, while recording the highest level of $1.2809 and lowest level of $1.2664.

The British Pound gained against the dollar as well, driving the GBP/USD pair to trade around $1.53329 from, the opening level of $1.5321, while recording the higest level of $1.5404 and lowest of $1.5316.

Finally, the Dollar rose faintly against the Japanese Yen, as the USD/JPY pair trades around ¥76.83 from the opening level of ¥76.82, while recording the highest level of ¥76.88 and lowest levels of ¥76.55.