European session: The euro gained even as Moody’s Investors Service cut Ireland’s credit rating.

Data:
09:00     Germany     IFO business climate index (December)    109.9    
10:00     EU(16)     Trade balance (October) adjusted, bln     3.6    
10:00     EU(16)     Trade balance (October) unadjusted, bln     5.2   

The euro rose against the dollar for a second day after European Union leaders agreed to create a mechanism to contain future debt shocks and German business confidence unexpectedly climbed.
The euro gained even as Moody’s Investors Service cut Ireland’s credit rating.
The EU summit result “sets the stage for further consolidation, such as cross-border guarantees” between member states’ debt, said Geoffrey Yu, a foreign-exchange strategist at UBS AG in London. The agreement “is not negative for the euro. If they had downgraded Ireland to junk right now I don’t think it would make too much of a difference, because the country is already shut out of markets anyway.”
German business confidence unexpectedly rose to a record in December as stronger domestic demand helped bolster the recovery in Europe’s largest economy, according to data published today.
The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, increased to 109.9 from 109.3 in November. That’s the highest since records for reunified Germany began in 1991. Economists predicted a drop to 109, the median of 36 forecasts in a survey shows.
Moody’s cut Ireland’s credit rating by five levels to Baa1 after the government was forced to ask for external aid last month, staggered by losses in the banking system.

EUR/USD: the pair shown high in the field of $1,3360. Later the rate decreased below a mark $1,3300.

GBP/USD: the pair decreased in around $1,5580.

USD/JPY: the pair bargained within the limits of Y83,70-Y84,10.


US data at 1500GMT includes BLS State Unemployment as well as the index of leading indicators, which is forecast to jump 1.2% in November, with positive contributions from every component except for possibly weaker building permits.