Mixed Sentiments Dominate Markets on Europe’s Debt Crisis Fears; Inflation Trapped in the U.S

Cautious optimism prevailed the financial markets today, with improved economic reports capping a busy week for the U.S economy, as economic fundamentals proved the world’s largest economy is on the right track of recovery as 2011 nears to end, but negative vibes are still cited among traders as the EU leaders face a three-day deadline to build up funding package to battle the region’s debt crisis.

So far, the Federal Reserve prophecy is about to be fulfilled by the end of this year, as all key inflation data suggest that price pressures in the U.S are no longer a threat to the economic rebound, therefore, the Fed could have more space to consider more stimulus if the recovery falters, which is not likely to happen now as the economy seems to be adding stream at stronger pace than forecasted.

Currency trading was limited today in light of a mix of positive economic reports and fears over Europe’s debt crisis on Friday, where the U.S. dollar steadied against a basket of major currencies on Friday, where the U.S. dollar index was trading at 80.12, compared with the opening level at 80.16. The Euro was little changed against the Dollar, where the EUR/USD pair traded around $1.3040, compared with the opening level at $1.3029.

The British Pound consolidated against the Dollar as well, where the GBP/USD pair traded around $1.5521, compared with the opening level at $1.5522, and the U.S. dollar dropped faintly against the Japanese Yen, where the USD/JPY pair was trading at 77.66, compared with the opening level at 77.85.

Stocks in the United States were up at early trading on Friday, paring a weekly for the Standard & Poor’s 500 Index, as the Dow Jones Industrial Average was higher by nearly 0.5% to trade around 11,9332, while the S&P 500 index was higher by nearly 0.9 percent to trade around 1,226. European stock indexes were mixed before closing on Friday, where FTSE 100 was up by 0.15% to trade at nearly 5,408 and the DAX was lower by nearly 0.30% to trade around 5,571.

The yellow shiny metal gained to trade around $1,593.07 an ounce after gold prices opened at $1,575.34 levels while crude oil prices rose to trade around $93.83 a barrel since the opening price of $93.72 levels.

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