Monday, 3 Jan 2011

Euro Advances Following Positive US Data

A positive US ISM Manufacturing PMI earlier today generated risk taking among investors, as confidence in the global economic recovery continues to rise. Subsequently, the euro saw gains against virtually all of its main currency rivals, including the safe-haven US dollar and Japanese yen. Since the PMI was released at 15:00 GMT, the EUR/USD pair has gone up almost 70 pips, while the EUR/JPY went up close to 40. Currently both pairs are trading around 1.3360 and 109.10, respectively.

Turning to tomorrow, traders will want to pay particular attention to the US FOMC Meeting Minutes, scheduled to be released at 19:00 GMT. Should the meeting minutes indicate further improvements in the US economy, the euro could maintain its current course, and could even push the 1.3500 resistance level against the greenback.