Currency Updates:
The US dollar edged lower yesterday as the eurozone officials’ meeting initially resulted in a heightened risk appetite. During the US session the greenback rebounded as risk appetite started to fade and US equities jumped after data showed US Consumer Confidence bounced in November indicating that the US economy remains strong. Versus the Japanese yen, the greenback dipped to 77.62 from 78.28 but later the pair rebounded to 78.10. Attention shifts to ADP Employment Change expected later today.
The euro edged lower today trimming some of its gains as investors appear cautious over the eurozone officials’ plan to resolve the growing debt problems in the region. Eurozone finance ministers agreed to boost the firepower of the European Financial Stability Facility with 250 billion euro of capacity available for leveraging and several EFSF leveraging options are being discussed. They agreed to release the sixth tranche of funding to Greece and Eurogroup Chairman Juncker said the money would arrive by the middle of December. Today, Asian equities fell and precious metals plummeted as optimism in the market starts to fade. Versus the dollar, the single currency jumped to 1.3441 but today it slid as low as 1.3258. The market is now focusing on the European Union summit on December 9 where Germany and France are expected to discuss the European Central Bank’s role in fighting the eurozone debt crisis.
The British pound rallied to 1.5655 from 1.5469 against the greenback supported by a heightened risk appetite. Data from the UK also supported the sterling after Housing Prices in November showed higher than expected figures. Later the pair surrendered its gains top trade as low as 1.5530.
Oil prices rallied to 100.12 dollars a barrel from 97.05, a rise of 3.2%. Gold rose to 1726.48 dollars an ounce from 1703.53. Silver also ticked higher to 32.19 dollars an ounce from 31.48.
