By FX Empire.com
Optimism spread through global financial markets on Monday amid reports EU leaders are discussing strong measures to ease the European debt crisis, which pushed the U.S. dollar sharply lower against major currencies, as risk appetite improved in markets, where investors were encouraged to target higher yielding assets, as equities, commodities, and major currencies gained.
Moreover, investors were also feeling optimistic after reports from the United States signaled that retail sales on Black Friday were strong, which boosted optimism with the start of the U.S. holiday shopping season, as consumers seeking bargains hit the stores to take advantage of discounts, and that could ultimately be reflected through higher consumer spending and accordingly, rising economic growth in the final quarter of this year, since consumer spending accounts for nearly two thirds of economic growth in the United States.
Fears from Europe eased over the weekend after a report suggested the International Monetary Fund was working on a plan to helpItaly, although the IMF denied any negotiations withItaly. Nonetheless, traders were optimistic that EU leaders are working on drastic measures to ease mounting concerns in markets over the outlook of the European debt crisis. Traders are now eyeing the EU finance ministers meeting on Tuesday atBrussels, where expectations signal that they will announce details of their plan to increase the firepower of the European Financial Stability Facility EFSF fund.
Moreover, the new home sales index was released from theUnited Statesfor October, where new home sales rose by 1.3% to an annual rate of 307,000 units, compared with the prior estimate of 303K, but below median estimates of 315,000 units.
The U.S. dollar fell from its highest level in seven weeks against a basket of major currencies on Monday, where the U.S. dollar index was trading at 78.92, compared with the opening level at 79.32. The Euro rebounded to the upside against the Dollar, where The EUR/USD pair traded at $1.3365, compared with the opening level at $1.3309, the British Pound also rallied against the Dollar, where The GBP/USD pair traded around $1.5540 compared with the opening level at $1.5485, and the U.S. dollar extended its gains against the Japanese Yen, where the USD/JPY pair was trading around 78.13, compared with the opening level at 77.68.
Stocks in theUnited Statesgained strongly by opening on Monday, as the Dow Jones Industrial Average was up by nearly 2.85% to trade around 11,552, while the S&P 500 index was up by nearly 3.20% to trade around 1195. European stock indexes also rallied before closing on Monday, where FTSE 100 was higher by nearly 2.85% to trade at 5312 and the DAX was up by nearly 4.45% to close around 5736.
gold prices also rebounded to the upside to trade now around $1714 an ounce and crude oil prices gained as well to trade around $99 a barrel.
Originally posted here
