Despite the jitters and rising fears in the market, the U.S. private sector was able to ease the sharpness of pessimism seen in the market after it added more than expected jobs to the economy, indicating the U.S. economy return on the right track to overcome the sluggish growth.
The U.S. dollar slipped further after the upbeat employment report from the private sector, where demand for the low yielding currency sagged as jitters eased in the market, awaiting the critical FOMC rate decision later on the day.
The U.S. dollar index (USDIX) opened the session in Asia today at 77.31, and recorded the highest at 77.58 and the lowest at 76.82, and is currently hovering around 76.91.
Moreover, the euro continues to trade positively despite jitters and rising debt woes amid the complex situation in Europe, where after the Greek Prime Minister, George Papandreou suddenly decided to hold a general referendum on the second bailout deal without discussing the matter with his European colleagues, Papandreou went to France to hold a meeting with Sarkozy, Merkel, Legarde, Barroso, Rehn and Junker.
Moreover, heavy fundamentals from Europe added to concerns that leaders must implement the final plan approved on October 27 as soon as possible, where the deepening debt crisis effects are clearly seen on fundamentals, where the manufacturing sectors in Germany and Europe contracted, while unemployment rose unexpectedly in October, awaiting the European Central Bank rate decision tomorrow, with hopes that the bank could ease jitters and provide new moves to quell the markets turbulence.
The euro was able to gain strength despite all the bearish data from Europe, where markets could have found some hope in middle of the general pessimism, awaiting any comments from policy makers regarding the leaders' meeting in France, where eyes are looking forward to the Greek government to negate the referendum as Greece will not last long without aid from the European Union and the IMF.
Greek poll mentioned that 46% of the sample asked rejected the idea of applying austerity measures; however, seven persons out of ten wanted Greece to remain in the euro-area. Therefore, expectations indicate that Greeks could vote with second bailout deal since a no vote could lead Greece into a disorderly default and in result out of the euro zone.
The EUR/USD pair opened the session today at 1.3699, and recorded a high of 1.3802 after setting the lowest at 1.3635, while the euro is currently trading around 1.3788 against the weakening U.S. dollar.
The sterling pound was able to gain strength against the U.S. dollar, supported by the upbeat construction data, which showed that the sector's performance improved to 53.9 compared with the previous of 50.1, beating estimates of 50.0.
The GBP/USD pair opened the session in Asia at 1.5945, and recorded the highest at 1.6047 and the lowest at 1.5915, and is currently hovering around 1.6010.
Finally, we mention that volatility and heavy fluctuations are highly possible due to the mixed sentiment and the huge load of data today and this week also, especially with the G20 meeting starting tomorrow, the European Central Bank rate decision, the jobs report on Friday and the FOMC rate decision later on the day, where the gains seen across the board could only be correctional moves.