Asian stocks were on the downside as the Yen gained in strength damping the outlook for Japanese export earnings while commodity shares increased on rising commodity prices. The MSCI Asia Pacific Index rose 0.2% on the course for the highest level since June 2008 on speculation that growth in corporate earnings will be able to counter EU's debt crisis, Chinese inflation curbs and US economic recovery. The Nikkei dropped 0.9%, Hang Seng dropped 0.1% and Shanghai Composite dropped 0.25%. Chinese HSBC Manufacturing Index showed a slowdown in manufacturing growth to 54.4 for the first time in five months as tightening policy measures were implemented and expectations are strong that interest rates could be hiked at least twice in first half of 2011.The Dollar weakened against most currencies as global recovery expectations are driving investors towards higher yielding assets and today's jobless claims forecast to show a drop while pending home sales expected to rise. AUDUSD climbed to the highest since 1982 to 1.0198, USDJPY dropped to a seven week low of 81.29 on speculation that China will allow the Yuan to appreciate at a faster pace, EURUSD rose to 1.3260 on expectations that Italian business confidence rose to the highest since March 2008 and other Asian currencies rose on strong Asian stock performances. Before the year ends, the last of the important news would be released today with US jobless claims, pending home sales, Chicago purchasing manager, oil inventories while Italy releases business confidence figures while we could see UK house prices being released tomorrow.

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