The Euro/USD has strengthened further trading at 1.3493 close to the critical 1.35 level eyeing 1.37 – 1.38. The US dollar has except for Japanese Yen lost ground against most currencies. USD/JPY trades steady in the range between 90,50 – 91 yen a dollar near the peak of 91.32 reached on Monday. This is the lowest level seen for yen since June 2010. Euro also gained 0,3% to 122,78 against the Yen. The prospect of a weaker yen and increased risk appetite lifted the Australian dollar and the New Zealand kiwi to a four year high against yen. GBP/USD fell back to 1.5745.
Stock markets continue to see new highs not seen for years. The Asian indexes led by the South Pacific MSCI rose to the highest levels in 18 months. A strong US housing market and stabilization inside the Euro zone boosted investor confidence and the global economic outlook. Commodity prices continue to raise with copper adding another 0,6%. Oil prices reached its highest level seen in months. Brent crude trades above USD 114 and the New York, NYMEX, is steady in the range of USD 97 – 98 a barrel.
The US Federal Reserve (FED) ends its two days meeting on Wednesday. It is expected that FED will continue with its monetary easing policies. This amidst speculation that the better prospects for US economy might soon end FED’s aggressive asset buying program. Investors will focus on the final statement and look for any clues to a change in FED’s policies. A continuation of FED’s policies will strengthen the continued rotation of funds from the bond market into shares, boost emerging markets and weaken the attractiveness of safe-haven assets.
The US stock market was very strong yesterday. Dow Jones was close to reaching the 14 000 index level. European stocks delivered better than in months as US companies continue to beat earnings forecasts. The leading on line book store, Amazon, delivered upbeat results which lifted the share 10%. Car maker, FORD, saw excellent results in the US, but sales in Europe disappointed. Most European equities rose to fresh two-years high. Together with US and Asia these increases boost stock markets as the favorite place for investments in 2013.
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