Tuesday, 1 Feb 2011

EUR/USD Reaches 10 Week High as Risk Appetite Soars

The euro reached a 2-1/2 month high against its US counterpart today, as positive manufacturing data from the US and UK boosted confidence in the global economic recovery. Investors appeared to be more inclined to shift their funds toward riskier currencies like the euro and sterling throughout the day. The EUR/USD, currently trading at 1.3820, is up almost 130 pips from earlier this morning.

Meanwhile, worries that Egypt's present unrest would spread to other countries in the Middle East appear to have subsided. As a result, crude oil appears to have halted its bullish run, and is starting to fall. Crude is currently trading at $90.75, down from today's peak of $92.45.

Turning to tomorrow, traders will want to focus thier attention on the US ADP Non-Farm Employment Change figure, set to be released at 13:15 GMT. The ADP figure is considered one of the most significant economic indicators out of the United States, second only to the Non-Farm Payrolls figure, set to be released on Friday. At the moment, analysts are forecasting a steep drop from last month for tomorrow's figure. If true, the dollar is likely to extend its bearish run.