The US dollar weakened as European leaders move closer towards resolving the region’s debt crisis

Data yesterday for the UK was disappointing as annual housing prices dropped to -3.7% in November. There was also disappointing results for the US, as Chicago PMI dropped to 60.2 from December’s 62.5, despite analysts’ expectations that it would a rise to 63.3.

Data yesterday for the UK was disappointing as annual housing prices dropped to -3.7% in November. There was also disappointing results for the US, as Chicago PMI dropped to 60.2 from December’s 62.5, despite analysts’ expectations that it would a rise to 63.3.

Risk on sentiment forced the US Dollar to weaken after Greek Prime Minister Lucas Papademos said that progress had been made in debt-swap talks with the nation’s bondholders. European lenders may also ask the European Central Bank next month for twice the amount of loans that they took for December’s refinancing operation.

Yesterday, Eurozone unemployment data showed that there were 34,000 fewer workers without a job than at the same time last month. These figures however, also show that unemployment in the region has hit its highest level in history at 10.4%. The situation in Greece and Portugal remain deeply troubling, with unemployment rising and austerity kicking in.

The Greenback endured a torrid ten days in the lead up to last Friday’s weekly market close, a move which was caused by an up-tick in global appetite for risk. This week’s session opened with market participants feeling nervous about ever-widening Portuguese debt spreading and the on-going policy-void in Greece. A Dollar comeback could be on the cards.

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