The dollar surprisingly rose against the euro after an unexpected rise in US economy

The dollar surprisingly rose against the euro after an unexpected rise in US factory new orders in November. The Federal Reserve's meeting minutes too was in talks, which maintained another round of Quantitative measures was needed to give more strength to the US economy.Richard Grace, chief currency strategist at Commonwealth Bank,said: "But those minutes were slightly more optimistic in detail than the actual December statement. Incoming US data is quite good and that's part of the reason why I think the dollar is going to remain with a reasonable bid rntone. I suspect that we'll see that continue to a certain degree, but by and large range-bound, until we see the release of non-farm payrolls this Friday."But the Pound rose against the dollar after many short positions, due to a faster UK manufacturing activity last month.rnThe Nikkei gained after signs of a strengthening US economy in the form of good maunfacturing data boosted optimism. Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd., said: "The US data were good. Investors are looking on the bright side, and there is support from excess liquidity.”The Nikkei 225 rose 1.7 percent to 10,398.10. The S&P 500 Index fell for the first time since September 2008 from the highest level yesterday after commodity prices weighed down by a strong dollar. The Minutes from the last Federal Reserve meeting revealed that the rnCentral Bank considered lending money as a QA measure since the recovery of the US economy wasn't strong enough.Liam Dalton, president of Axiom Capital Management Inc., New York, said: "The market is in a very reactive mode, trading off data points, and that kind of news dependency speaks to a lack of commitment by investors to stay invested." He added : "I would be suspicious of any strength early this year because we have conflicting signals and the overall economy may be improving, but it is still not so strong that it can support a major bull rnmarket.” As the dollar grew stronger,the oil prices fell after a year end rally in raw materials was steep.Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp, said: "Ninety dollars a barrel already has a very strong economic picture built into the price. Maybe people think the price is starting to get too high, and if the dollar is stronger, we should have lower commodity prices."Oil for February delivery fell 72 cents to $88.66 a barrel. rnGerman 10-year bunds closed on a higher note as the fiscal crisis that roiled the euro area’s most-indebted nations drove investors to the safest fixed-income assets in the region.Orlando Green, assistant director of capital-markets strategy at Credit Agricole Corporate & Investment Bank in London said: “There has been a rnflight-to-quality and Europe has been divided between the haves and the have-nots. The have-nots are clearly the likes of Greece and Ireland, and they needed to be bailed out. The risk going into next year is that this domino effect could continue.”rnDespite a strong dollar, gold managed to stay high by a 0.3 percent rise.rnBut gold futures suffered a bit after speculation that if the US economy recovers, the demand for gold could be undermined. Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago, said: "Gold is rolling over. Some of the flight-to-quality bid is coming out of gold. The money that was expected to come into the rnmarket isn’t there.”A report showed manufacturing grew in December at the fastest pace in seven months and construction spending increased in November, so this news had a positive impact on the US Treasury Market , which closed on a positive note.Sean Simko, who oversees $8 billion at SEI Investments Co. in Oaks, Pennsylvania said: “As long as the economy continues to show signs of a self- sustaining recovery and supply is kept under control, yields will move higher, and that’s what we are seeing in the selling pressure. Rates will move high in 2011, but in a choppy fashion.”