Markets on Wednesday barely managed to hold onto their rally for the fourth day, but the euro fell 0.3 percent to $1.2359, following its one-month high on Monday of $1.2443. The Dow Jones industrial average gained 0.05 to 13,175.64. In Thursday's Asian session, however, the euro rose again to $1.2380, signaling that investor optimism is not yet dead. Asian shares showed significant gains following reports from China that inflation fell to a 30-month low of only 1.8 percent in July, down from 2.2 percent in June. The MSCI Asia Pacific Index gained 0.5 percent to 120.67 and the Nikkei 225 Stock Average gained 0.7 percent in Asian trading. It was also announced on Thursday that Australian employment also surpassed expectations, contributing directly to the rise of shares across the region.
Investors are waiting to see how China will respond to a slowing economy, whether the US Federal Reserve will expand its monetary easing and whether the European Central Bank will purchase bonds to reduce Spanish debt. Four days into a positive market upswing, trading volumes continue to remain low during the vacation season, and the reduced trading pace is expected to continue into the coming week.