The euro rose today against a basket of currencies after Greece approved new tough austerity measures. The new austerity package is demanded by the European Union in return for the new bailout fund but the vote led to violent protests in the streets of Athens. Asian equities gained on optimism that the risk of default for the country starts to fade. Against the dollar, the single currency climbed to 1.3272 from 1.3206. Focus now turns to this week's debt auctions by Italy, Spain and France.
The US dollar appears softer against its major counterparts at the start of the new week. Gross Domestic Product data revealed that the Japanese economy contracted by more than expected in the fourth quarter. Figures showed a 0.6% contraction compared with the previous 1.4% as the country's exports are affected by the strong yen and a global economic slowdown. Following the GDP data, the yen dropped moderately versus the dollar and the pair rose to 77.78 but later fell to 77.56. Eyes turn to tomorrow's Interest Rate Decision by the Bank of Japan which is expected to keep rates unchanged. On Friday, US Consumer Sentiment Index showed a lower than expected figure of 72.5 further weighing on the dollar.
The Australian dollar advanced against the greenback today as Greece's approval of the new austerity package boosted the demand for high yielding assets. Australian home loans data further supported the Aussie after an increase by more than expected in December. The pair rose to 1.0753 from 1.0639 traded on Friday.
Oil prices jumped to 99.64 dollars a barrel from 97.37 traded on Friday. Gold edged higher to 1731.27 dollars an ounce recovering from 1704.75. Gold also rose to 1307.24 ounces against the euro from 1301.69. Silver edged higher to 33.89 dollars an ounce from 33.17.
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