The euro’s rally paused on Friday as investors are now focusing on talks between Greece and its creditors. The single currency rose broadly yesterday as risk appetite dominated the markets climbing as high as 1.3183 against the dollar but today the pair fell to 1.3077.  Asian equities turned negative and commodities softened today after yesterday’s jump as a debt swap arrangement between Greece and its private creditors is not yet reached. Italian 10-year yields fell below 6% for the first time in six months further boosting risk appetite.

The US dollar tumbled against its major counterparts weighed by the Fed’s decision to keep interest rates at ultra low levels until late 2014 and by expectations for a third round of quantitative easing. Versus the Japanese yen, the dollar slid to 76.89 from 77.80 reversing a rally that began last week. Japanese Minister Noda said that the Bank of Japan must act in order to curb the yen’s rise. Yesterday’s economic data showed the US Durable Goods and Chicago Fed National Activity Index were better than expected while New Home Sales fell for the first time in four months and Initial Claims rose to 377K. Attention shifts to the US Gross Domestic Product figures due later today, which is expected to reveal the world’s largest economy grew at its fastest pace in almost two years in the fourth quarter.

The British pound rose to a five-week high against a weaker dollar yesterday hitting 1.5735 from 1.5650. But Sterling came under pressure against the single currency falling near a four week low at 0.8229 on concerns about the UK economy. Data this week showed the UK economy contracted in the fourth quarter of 2011 raising expectations that policymakers may decide to inject more money into the ailing UK economy.

Oil prices rallied to 101.35 dollars a barrel yesterday but later it slid to 99.20. Gold also rallied to 1729.91 dollars an ounce from 1703.02 but today it eased to 1714.45. Silver edged higher to 33.78 dollars an ounce from 32.98.

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