a covered bond auction of Portugal could help the single currency today to retrace some of its recent loses especially as it could find support at 1.297 yesterday as expected it was not easy to get down further breaking this support without bouncing. The single currency is now trading above 1.31 versus the greenback after the pressure on it has eased and the European equities markets have been cheered with this covered auction which has been on a relatively high yielding than before increasing the risk appetite of the investors which sold back the greenback and the Japanese yen carrying new risky trades as The market focusing has been turned to Portugal and Spain and the expected European requests for them for having a part of the available low cost bailing out package for funding their accumulated deficit which is weighing negatively on their creditability and the single currency domination which suffered strongly last month easing from 1.4281 by the release of US non-farm payroll of October which has come better than expected adding 151k after losing 41k in September while the market was waiting for adding just 60k encouraging the investors to take profits after the Fed has actually taken its waited decision of adding another 600B to its new adopted quantitive easing policy of buying US treasuries till the end of June 2011 driving the greenback before the profit taken wave which has been fueled beginning fueled by market worries about the debt situation of the European countries again and the tension of the semi Korean island which tempered the markets pushing the inventors to square further their carry trades buying back the greenback. The DAX 30 is trading up now more than 150 points and CAC 40 also making more than 50 points with the markets improving looking back again at the economic performance after the worries about the bond market have calmed down albeit watching the germane retails sales figure of October rising up by 2.3% monthly while it was expected to be up by just 1.3% today after falling in September by 1.8% and EU manufacturing PMI index coming above 55 as expected at 55.3 in November from 55.5 in October and also the PMI manufacturing figure of UK has helped the market risk appetite too today by a surprising reading of its November manufacturing PMI which came at 58 well above the market expectations of 54.7 from 54.4 in October and by god's will we wait now from US for November ISM Manufacturing to be 56.3 from 56.9 in October and By the end of this week for US non-manufacturing indexes to be 54.7 from 54.3 in October and also by the end of the week for US non farm payroll to be 145k from 151k in October and the US factory orders of October to get down by .7% after rising in September by 2.1%
Best wishes
FX Consultant
Walid Salah El Din
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