U.S. Budget Optimism and Euro Rally

The Solid Euro Above 1.3200. With the approach of the holidays, the dollar enters the stage konsolidatif although overall traded lower against major currencies. Market participants continue to monitor U.S. budget talks and despite signs of progress in the budget negotiations, the forex market does not respond strongly about it, while many analysts assert that the deal should have expected at this point. On Tuesday, the euro and the pound hit a high against the dollar, while the currency-related commodities such as AUD and CAD moved lower after the RBA said that mining investment is estimated to have peaked. Meanwhile, the greenback traded above 84.00 against the yen, this is the highest level in almost eight months, as the Japanese currency weakened amid speculation the BOJ might be easier to make policy further on Thursday. "When the terms of trade is rather thin and could move unexpectedly, our bias for further currency trading is bullish in the short term". Said Nick Bennenbroel, an analyst at Wells Fargo Bank.
 

Sterling Mute Fear Inflation Data. Pound rose to their highest in more than 2 ½-month low against the U.S. dollar after UK inflation data dampen expectations of further QE by the Bank of England in the near future. UK consumer price inflation was steady at 2.7% in November after posting a staggering surge in the previous month. But some analysts warned that Sterling could again depressed if the BoE meeting minutes released Wednesday showed more dovish. "Sterling has shown strong performance in recent sessions," said Audrey Childe-Freeman, currency strategist at BMO Capital Markets. "Regardless of the numbers of stable inflation, the central bank meeting minutes and retail sales data was the main focus this week. Minutes a more dovish Sterling returns to risk a vulnerable position."

Hurting Aussie RBA Minutes. The Australian dollar hit after minutes meeting the Reserve Bank of Australia shows if the weak labor market is the main reason that drives interest rate cut in December. In the RBA's minutes also assess if China's growth is stabilizing. But the weaker currency often called Aussie is still limited after major economic indicators released Conference Board Australia has recorded an increase in October. "Expectations of lower interest rates further RBA Jula has brought pressure for the Aussie," said Takuya Kawabata in their speak, some researcher at Gaitame.com Research Institute Ltd.. in Tokyo. "But the Aussie back making demand after the market digested some positive comments about the growth of China. RBA may still be wait and see what happens before deciding further interest rate cuts next year."

U.S. Budget Optimism and Euro Rally. The euro soared to its highest level in more than a 7-month high versus the U.S. dollar as the emergence of signs of progress in the negotiations the U.S. budget, which sparked risk appetite in the market. Market players sold safe-haven assets like the dollar amid optimism that U.S. politicians will be able to reach an agreement to avoid "fiscal cliff ', a combination of tax hikes and spending cuts that risk drowning the world's biggest economy back into recession next year. The achievement of a new compromise on the U.S. budget assessed as a positive thing that can trigger risk appetite and favor riskier currencies like the euro, which in turn would weigh on the Greenback. The increase shown euro also helped push Spanish and Italian bond yields moved lower and boost demand for European stocks.