Risk Appetite Whetted, Euro and Aussie Gain

By: Barbara Zigah

Improved earnings from U.S. technology leader, Intel, whetted risk appetite in Asian trading, helping both the Australian Dollar and the common currency Euro to rise versus the safe haven currencies. As reported at 12:43 p.m. (JST) in Tokyo, the Euro traded against the Japanese yen at 127.34 Yen, an increase of .4% and above the 100-day moving average set at 127.03 Yen. Against the U.S. Dollar, the Euro gained .3% to trade at $1.3654. The Australian Dollar also traded higher versus the Yen and U.S. Dollar, gaining .3% to trade at 86.82 Yen, just off a recent 18-month high; versus the greenback, the Aussie traded at $0.9312, a rise of .3% and just off the 5-month high set this past Monday.

Policy tightening by the Monetary Authority of Singapore effectively revalued the Singapore currency. Markets perceived the actions by the MAB as an indication that the Singapore economy is steadily improving. Some analysts wonder if the MAB’s stance may reignite speculation that the Chinese authorities may follow suit and and revalue their currency, the Yuan.

Today, markets will turn their attention to the United States where Ben Bernanke, the Chairman of the Federal Reserve Bank, will present his economic outlook before the U.S. Congress. An investor note from J.P. Morgan suggested that Mr. Bernanke will likely reaffirm the current stance of the Federal Reserve, and no major announcements will be forthcoming.