The EURUSD is up sharply this morning as equity and commodity market confidence knocks the dollar.
The EURUSD is up 0.821% at 10am in London. 1 EUR = 1.4978 USD.
The Dollar had strengthened against the Euro last week, as global stock markets retreated and diminished demand for higher-yielding currencies.
Daragh Maher, deputy head of global foreign exchange strategy at Calyon, said Friday was a, "risk-off day, equity markets were down, and in that kind of environment the Dollar and the Yen get bid"
Foreign Currency service providers TorFX say that last week also saw strong talk from US officials as being behind US Dollar strength.
"The US Treasury Secretary Timothy Geithner said that he expects the U.S economic recovery will extend into next year and called on Congress to pass legislation intended to prevent another financial crisis. The Dollar also gained versus the Euro, amid speculation that traders trimmed short positions, after the U.S currency failed to weaken beyond $1.50 per Euro," says a morning currency market note from TorFX.
The FOMC reiterated on November 4th that they will keep interest rates near zero for "an extended period" while saying that policy will stay unchanged, as long as inflation expectations are stable and unemployment fails to decline.
The Dollar rose against all of its major counterparts on Friday, as investors sold shares and bought short-term Treasuries to reduce the chance of losses before the end of the year.
The focus this week in the US will fall on the release of the minutes from the last FOMC policy meeting, alongside the latest data in terms of consumer confidence and the Fed's preferred measure of inflation in personal income and spending.
In the Euro-zone, the release of the key sentiment and activity survey data for November is likely to dominate and the Euro may be susceptible to swings in risk sentiment.
