Tuesday, January 25, 2011

Dollar Softer As Risk Appetite Climbs Higher

The U.S. dollar traded softer as demand for risk climbed higher.
EUR/USD advanced to new 2-month highs trading as high as nearly 1.3685
earlier in the session on positive comments regarding Spain's resolve
to strengthen savings banks or cajas. There was no significant U.S.
economic data released today but rumors about the size and scope of
the European Financial Stability Facility - the EFSF - helped to keep
the euro bid. In other currencies, AUD/USD tested above parity but was
unable to sustain a move above 1.0000 and declined to current levels
of around 0.9975. GBP/USD rose towards the 1.60 figure but faced short
term horizontal resistance around 1.6010/15.

U.S. equities spent much of the session grinding higher with the Dow
Jones Industrial Average finishing to the plus side increasing by
above +0.91%. The S&P 500 traded with a positive tone as well, ending
higher by about +0.58%. Commodities faltered with gold and silver
declining by about -0.55% and -2.15% respectively while oil slid by
roughly -1.59%. U.S. 10-year Treasury yields were slightly lower,
shedding about 1 bps to around 3.40%.

On the data front down under is Australia's November conference board
leading index, 4Q NAB business confidence, and consumer prices.
Source: ActionForex.Com

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