By FX Empire.com
A huge wave of optimism spread through global financial markets on Thursday after EU leaders agreed on plans to ease the European debt crisis including a plan to writedown 50% of Greek debt, in addition to expanding the size of the European Financial Stability Facility EFSF fund to 1 trillion euros, which boosted risk appetite in markets and supported demand for higher yielding assets, as major currencies, equities, and commodities rallied, while the U.S. dollar and other lower yielding assets fell.
Moreover, the U.S. Commerce Department released the advanced GDP estimate for the third quarter of 2011, where the U.S. economy expanded by 2.5%, in line with median estimates and compared with the prior expansion of 1.3% in the second quarter. The GDP report further supported confidence in markets. Also, U.S. companies continued to announce strong financial results, which further bolstered confidence around global markets.
The U.S. dollar was heavily lower against a basket of major currencies on Thursday, where the U.S. dollar index was trading at 75.20, compared with the opening level at 75.89. The Euro gained sharply against the Dollar, where the EUR/USD pair traded around the highest level since early September at $1.4130, compared with the opening level at $1.3885, the British Pound also gained against the Dollar, where the GBP/USD pair traded around $1.6059, compared with the opening level at $1.5970, and the U.S. dollar fell against the Japanese Yen to hit a new record low, where the USD/JPY pair was trading at 75.83, compared with the opening level at 76.170.
Stocks in the United States were sharply higher by opening on Thursday, as the Dow Jones Industrial Average was higher by nearly 1.95% to trade around 12,100, while the S&P 500 index was up by nearly 2.15% to trade around 1268. European stock indexes were also higher before closing on Thursday, where FTSE 100 was up by nearly 2.45% to trade at 5688 and the DAX was up by nearly 4.70% to trade around 6298.
Gold prices were slightly higher on Thursday to trade now around $1727 an ounce and crude oil prices rallied to trade around $93 a barrel.
Read more Forex Market Updates here.
