Commodity Currencies Firm on Risk Appetite ahead of Holiday

Markets are pretty steady in thin holiday trading today. Euro is holding on to 1.3 against dollar despite making new record low against Aussie. Meanwhile, commodity currencies are generally higher, as lifted by risk appetite following positive employment data from US yesterday. Rebound in oil prices, which touches 100 again, is providing some additional support to the Canadian dollar. Recent actions in DOW suggests that a new high above 12284.31 might be seen next week just before the year closes and that could lead commodity currencies further higher.

ECB Executive Board member Bini Smaghi said that quantitative easing is appropriate " if economic conditions justify it, in particular in countries facing a liquidity trap that may lead to deflation." Smaghi noted that ECB is "given a clear mandate" of price stability ad it's "independent" to use the instruments to achieve it. Meanwhile, Smaghi also said that "the interest in the long-term refinancing operation may be a sign of confidence gradually returning,”

BoE Governor King, who's also vice chairman of the European Systemic Risk Board, said yesterday that growth prospects have deteriorated since September while financial stability outlook has worsened. "Investors lack confidence to continue to provide normal levels. The ESRB is "very conscious there is extreme risk aversion in private financial markets" and urged to have a "more robust banking system". ESRB's head, ECB President, Draghi didn't turn up to yesterday's press conference.

A series of strong earthquakes hit New Zealand's Christchurch today. And initial 5.8 magnitude quake was centered around 20km northeast of Christ church and followed by a serious of aftershocks, including a 5.3 magnitude one. New Zealand dollar is steady so far though.

On data front, Canadian GDP is a main focus today. Meanwhile, US will also release durables, personal income and spending, as well as new home sales.