USD

The dollar is trading weaker versus the majority of its main counterparts today due to the return of risk sentiment in the markets. The GBP/USD pair has risen 0.22% to the $1.2770 level. The AUD/USD pair is up 0.3% at $1.0371. The USD/CHF pair has slumped 0.18% to 0.9439 Swiss francs. The demand for the dollar is much lower today, as there is uncertainty over the fiscal cliff which may be averted if President Obama manages to come to an agreement with the opposition Republican party.

EUR

The euro is stronger today versus the dollar, but it has not managed to gain vs. the British pound. Traders have decided to buy into the EUR/USD pair today due to there being more hope that Greek aid will be on its way. This comes before an event this week where European ministers will meet to discuss this very issue. The EUR/USD is higher at the moment by 0.22% at $1.2770. The EUR/GBP crisis has slipped this morning by 0.02% to 80.22 pence.

JPY

The Japanese yen is trading much weaker this Monday morning versus its peers, as the opposition Liberal Democrat party is set to win the next election. The USD/JPY forex binary option has fallen today by 0.07% to 81.27 yen. Traders have decided to ditch the yen, as it seems that its woes will continue. It is important to take into account that the JPY is overvalued to some extent. Therefore, traders understand this, and that is why they have decided to sell the pair.

Stocks in Europe record their biggest weekly slump since June. This comes on the concerns that President Obama and the new Congress will be unable to agree to a new budget to avert the fiscal cliff.

The Stoxx Europe 600 Index tumbled 2.7% to 262.86 last week. The index has already lost 4.3% since Obama got re-elected to a second term. France’s CAC 40 Index slumped 2.4 percent. The U.K.’s FTSE 100 Index dipped 2%. Germany’s DAX Index made losses of 3 percent.

Vodafone fell 5.9%. EON slumped 16 percent. Hennes & Mauritz fell 4.7%. J Sainsbury Plc. slid 4.6%. Vivendi added 4.9% last week.

Crude Oil

Oil prices are trading higher for a second day, much to the relief of investors. The energy is stronger this morning by 64 cents at $87.56. Traders have a lot more confidence in the commodity today, as the dollar slumps.

The weaker dollar and the stronger crude oil prices is largely due to the growing likelihood that President Obama and the newly elected Congress will have to agree to a compromise over the fiscal cliff. This has really given oil prices the boost they have needed. There has been a lot of bearishness when it comes to this commodity lately.

Another important factor which has helped boost crude is the ongoing conflict between Israel and the Hamas controlled Gaza Strip.

As long as this conflict occurs, then oil prices may continue to be under upward pressure. Call options in the crude oil binary option may be the way to go this Monday.

USD/JPY

The Japanese yen is one of the weakest currencies this Monday morning. With the forecast of more monetary easing on the cards, it is no wonder that traders have decided to sell the JPY. There is also a lot of bearish sentiment with regards to the Japanese currency today due to the lack of demand for havens amid a bullish correction for undervalued currencies.