The dollar continued on its path to more strength as euro dropped on Spanish bailout concerns as it prepares for its final bond sale for the year and expectations of a Spanish bailout in 2011 to the tune of 170 Billion Euros and after Moody's kept the country on a credit rating watch for a possible downgrade. USDJPY gained strength on expectations of a positive housing market data from the US where housing starts rose 550k YOY while building permits gained 1.5% to 560k while US Treasury 10-year yields advanced to a seven-month high, attracting demand for U.S. assets. Asian markets were mixed as EU leaders meet today for a two day meeting to discuss the region's debt crisis amid concern that divisions within the EU will limit leaders' ability to agree on a permanent crisis-management system while the US will probably show jobless claims rose from last week supporting the Fed's decision to maintain record stimulus to boost an economy that isn't growing fast enough to spur employment. The MSCI Asia Pacific Index slid 0.3%, Nikkei was stagnant trading 0.05% while Shanghai was down 0.18%. USDJPY traded near a three month high of 84.38, EURUSD dropped 1.2% to trade at 1.3216, AUDUSD held strong support at 0.9854 while USDCHF gained strength to trade at 0.9696 highs before today's SNB rate decision. Today's economic calendar is packed with European data with Swiss industrial production and SNB releasing interest rate decision, Germany and EU releasing services and manufacturing data, UK releasing important retail sales data followed by EU inflation report. Dollar could continue its rise up after the US releases jobless claims report, building permits and housing starts and Philadelphia Fed. manufacturing data.

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