Risk Appetite helped US Dollar, other Currencies seems Volatile!

After closing down against the USD, for the 6th time out the past seven weeks, the Euro appreciated against 11 of its 16 major currency counterparts following French comments that helped aid risk appetite. Following the meeting between the French President Nicolas Sarkozy and Greek Prime Minister George Papandreou, the French President reportedly vowed to help Greece if needed and pledged to crackdown on market speculators targeting the country. The EUR/USD, however, has been having rather mixed reactions and continues to remain within its consolidation phase as the highly traded pair has been unable to rise toward last Wednesday’s highs of 1.3735 in the forex trading arena.

The Japanese Yen rose against the Euro, snapping a two-day drop, on speculation that Japanese companies are bringing home overseas earnings before the nation’s fiscal year ends this month. The Yen appreciated against all of its 16 major currency counterparts following China’s foreign-exchange regulator statement that speculative capital is flowing into the country, fueling optimism the funds will also boost neighboring economies. The Yen rose to 122.58 per Euro early this morning (6:38 GMT), from 123.13 per Euro in New York yesterday when it dropped to 123.90 per Euro, the weakest level since Feb. 23. Japan’s currency gained against the US Dollar, jumping from yesterday’s 89.99 to 90.31 this morning.

Across the Pacific, Australian business confidence increased in February for the second month in a row, adding to signs the economy is strong enough to sustain higher interest rates.Shortly after midnight, the National Australia Bank Ltd. (NAB) reported that both business confidence and conditions continued to strengthen in February to hit a four month high. The NAB business confidence index gained 4 points to plus-19 points in February, matching last November’s seven year high. Business sentiment in Australia is strengthening amid a rapid increase in Asian demand for Australian natural resources namely iron ore, increasing the chances that the RBA will likely raise the benchmark interest rate next month for the fifth time in six meetings. Australian advertisements for job vacancies jumped in February by the most in more than a decade as increasing Asian demand for raw materials stokes demand for skilled workers. Early this morning, the Australia & New Zealand Banking Group Ltd. (ANZ), reported that jobs advertised in newspapers and on the Internet climbed 19.1% from January, when they fell 8.1%. The increase was the biggest monthly gain since the index began including ads on the Web in 1999.

Yesterday the AUD/USD moved above the 0.90 range. Following the release of this positive economic data, the pair jumped to 0.91075, up 0.23% from the day’s open.

Later this morning (1130GMT), Australia will release the Westpac Consumer Sentiment- Survey of about 1,200 consumers which asks respondents to rate the relative level of past and future economic conditions, employment, and climate for major purchases. This indicator isn’t stable – it fell by 2.6% after rising by 5.6% beforehand. A slower rise is predicted this time.

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