FX.co ★ Fundamental Analysis, January 13, 2011

According to the recent report on the state of the U.S. Economy, the so-called ‘Beige book', the American labor market is beginning to show signs of recovery. The details shown in the report make it evident that six regions of the Fed, including Atlanta and Chicago, have reported moderate economic growth, while four regions, including New York and Boston, had pointed to improving conditions.

In Europe, Portugal's government has successfully raised 1.25 billion Euros (1.6 billion dollars) by government obligations, which has been seen as a test of the country's ability to win investor trust and raise capital on the financial markets.

Portugal's successful issue has come after, in the last two weeks, reports have spread that the Eurozone countries, including France and Germany, had pressured Portugal to accept international aid in an attempt to break the spreading of the debt crisis to the other European countries. That said, the European countries are still evaluating a possible aid package for Portugal including monetary assistance to the sum of 60 billion Euros in low-interest loans, this to calm the financial crisis threatening the Eurozone.

Due to the successful Portuguese issue of obligations, as well as reports regarding an increase in the EU bailout fund, as well as agreement over and international aid package for Portugal, Europe's stock markets responded positively, locking at sharp index rises, with London's stock exchange climbing by about 0.6%, Frankfurt’s stock exchange climbing by 1.8%, the Paris stock exchange climbing by 2.2%, the Lisbon exchange ascending by 2.5%, the Milano exchange climbing 3.8%, and the Madrid stock exchange leaping up by 5.4%.