EUR/USD Moves Back Up To 1.4795 After Dropping More Than 100 Pips

The US dollar strenghened on the back of falling European equities. It also chopped off recent gains in commodity prices. Friday's much better than expected US jobless data sent the dollar rocketing against other currencies as interest rate hikes from the Federal Reserve Bank became more likely.

Markets will now be watching closely for hints from Fed's chairman Ben Bernanke when he speaks later on in the session.

This week however, European stocks failed to benefit from the optimism about the US economy as fears of a market correction seem to persist. London's FTSE fell 0.5% as did Germany's DAX. The French CAC 40 lost 0.3%. Yet all indices recovered somewhat from earlier session lows. The economic outlook for the Eurozone was dented as the sentix economic indicator showed a decline of investors' expectations about the economy in the next six months. Disappointing German industrial orders for October (-2.1% vs. an expected 1.2%) added to the picture. EUR/USD moved back up to 1.4795 after dropping more than 100 pips in early European trade, down to session lows of 1.4756. The dollar firmed against most currencies with the dollar index rising to 76.046. The yen strenghened as well, in particular against sterling and euro. USD/JPY was down 51 pips to just above 90, levels last seen three weeks ago. Cable was down to 1.6343 and EUR/GBP rose to 0.9050. Ten year December Bund futures climbed 25 ticks to 123.05 on the back of falling shares and uninspiring German industrial orders. Long gilt March futures gained 13 ticks to 116.90. The stronger dollar pushed commodity prices down, with Globex gold February futures falling to $1,141. Globex January WTI futures fell 76 cents to $74.72. ICE January Brent futures fell to $76.93.