Investors are waiting for the PPI publishing in the USA

Forex outlook:

The yen edged up on Tuesday as investors squared positions and waited to see whether Bank of Japan Governor Toshihiko Fukui will signal that interest rates could rise as soon as next month. The BOJ left rates at 0.25 percent as expected at the end of a policy meeting, so market players shifted their attention to see if Fukui reinforces expectations for rates to rise in January in his post-meeting comments.

Any suggestion from Fukui of a rate rise next month to 0.5 percent could help spark a recovery in the low-yielding yen, which has been battered as investors sold the currency and used the funds to buy higher-yielding counterparts in the carry trade.
"Fukui will likely avoid specifying the timing of a rate hike but will certainly keep expectations alive for it," said Nobuo Ibaraki, forex manager at Nomura Trust and Banking.In the BOJ\'s monthly report, the central bank stuck to the view that the economy was expanding moderately but downgraded its description of personal consumption to say the pace of rise was "only modest".

For clues about the outlook for the U.S. economy and rates, the market will tune in to November readings for producer prices and housing starts, both due at 1330 GMT.
The U.S. Treasury will release its semi-annual report on foreign exchange on Tuesday, days after Treasury Secretary Henry Paulson returned from China with no major breakthrough on the value of the yuan.
In the euro zone, Germany\'s Ifo business climate index for December is due at 0800 GMT is expected to be steady at 106.8.

Gold: Gold and silver bounced back on Tuesday as selling subsided but the precious metals were seen prone to sharp fluctuations ahead of the year-end holidays.
"There was a successful test of the support level, so we may go up. But I will still expect the trading range to be $610 to $650until the end of the year. Dealers are looking forward to the holidays," said a dealer in Singapore. “I guess you could say yesterday\'s low was the bottom”.

Crude Oil: U.S. crude oil futures fell nearly 2 percent on Monday as mild U.S weather lingered in the eastern United States, curbing heating fuel demand.
That follows last week when demand was nearly 31 percent below normal because of mild temperatures. In the the coming week, demand for heating oil will be about 26 percent below normal, the NWS said.Heating oil was the oil futures complex biggest percentage loser on Monday. “It\'s like juggling and the focus depends on what you\'re about to catch," said Mike Fitzpatrick, vice president for energy risk management at Fimat USA.

 
 
Pool position: