Oil prices increased today after several days of stable prices and falls. Yesterday, oil prices fell as it was reported that the U.S. had larger inventories than analysts predicted. The main reason behind the price increase is positive numbers from China and Germany, suggesting that manufacturing increased, which in turn increases demand for fuel. Both China and Germany showed manufacturing numbers exceeding average expectations, causing other markets to rally as well. Asian currencies and global stocks were other winners in today’s financial markets.

The price of crude oil increased 80 basis points, making it one of the better days of trading during 2012. The net fall for January 2012 is 40 basis points, which makes it two consecutive months of price falls.

The Chinese currency, yuan, has been on a 7-day break due to celebrations of the Chinese New Year. On its first day of trading today, the currency managed to appreciate against the U.S. dollar. The main factor behind the U.S. dollar dropping is that the country decided to continue to keep interest rates at the current record low levels. As interest rates remain low, and the global economy unstable, demand for the U.S. currency decreased.

Previously during last week, Chinese officials claimed the their currency might be undervalued and that the Chinese Central Bank might take action to reverse the trend. However, analysts are saying that that isn’t the reason behind the yuan’s gain against the U.S. dollar today. The main factor is the overall demand for the U.S. dollar decreasing, rather than relative strength in favour of the Chinese currency.

The yuan gained 13 basis points against the U.S. dollar in the forex market today.

Asian currencies and stock markets have been appreciating a lot during the last couple of days. Apart from the Japanese yen, almost all Asian currencies are usually said to be risky assets. As the appetite for risk has increased the past days, so has demand for Asian currencies and stocks. The region’s currencies are currently at the highest value in around 8 weeks.

The main winners in the Asian region were the South Korean won, appreciating 40 basis points against the U.S. dollar, the Taiwanese dollar, appreciating 10 basis points against the U.S. dollar and the Indian rupee, appreciating 20 basis points against the U.S. dollar. The Philippine peso was gaining as well, but that came to a halt today as the country announced that they are about to cut their benchmark interest rate.

Apart from Asian currencies, a stock index over Asian stocks showed that they had gained substantially as well.

Risk sentiment increased in the forex market today as the euro went on a winning streak against most major currencies, mainly the U.S. dollar and Japanese yen. Concerns about the current debt crisis in Europe are outweighed by other, more positive news. Just two days after Standard & Poor’s announced that they have downgraded France’s credit rating, the European currency manages to bounce back and gain value.

One strong sign coming out of Europe is that the region’s crisis fund had no trouble raising capital, the fund managed to raise three times as much capital as the original aim. This was clearly a positive sign, as investors are staying active in the European region.

Furthermore, estimates for Europe’s growth the coming months increased substantially. Previous negative prognoses were cut in half as things are starting to clear up in the region.

The Turkish lira weakened 20 basis points against the U.S. dollar during todays trading session. The Turkish currency had previously been on a 2-day winning streak against the U.S. currency, meaning that the lira still remains at a positive level in 2012.

The Turkish Central bank decided to lend money at the lowest interest rate in the past week. Earlier in 2011, the Turkish government intervened heavily in the forex market in an effort to control prices. With this new announcement, analysts are stating that restraints have eased from the Turks.

The Turkish lira had a very tough 2011 as the currency depreciated around 18 percent, making it one of the forex market’s absolute worse performers. However, 2012 has started on a brighter note, the currency is currently up 1 percentage against an index of several other currencies.

Germany reported promising employment numbers, as it turns out the country is more resilient than many analysts and economists had previously estimated. The country reported a drop in unemployment in December, mainly due to a higher degree of car exports for the large German manufacturers. Another factor behind the welcomed report was favourable weather conditions that allowed for more outdoor jobs than last year when the country experienced a much colder December month.

The unemployment rate fell 120 percent more than the average prediction by economists, which boosted demand for German assets. The Germans are going on with their business as if the debt crisis does not affect them. Business confidence rose once again in December and general consensus in the German labour market is that jobs and employers are safe and stable. Two of the country’s largest exporters, Audi and Airbus, increased their rate of hiring.

As a result of good German news, the euro appreciated 0.7 percent in the forex market and Germany’s main stock index grew by 60 basis points.

The Canadian dollar appreciated against the U.S. dollar and several other currencies in the forex market today after the Canadian government reported that retail sales proved to be much higher than analysts had estimated, and the price for oil rose in the commodities market.

The Canadian dollar has been witnessing some depreciation lately as an uncertain global economy has caused investors to abandon risky assets and flee to the stability of the U.S. dollar. When the country experiences good news, risk sentiment rises which makes the currency rise as well.

The Canadian dollar appreciated 0.3 percent in total against the U.S. dollar. The currency also gained almost half a percentage against a basket of the major currencies in the world.

The Reserve Bank of Australia announced that the country’s economy is in good shape, as Australia keeps growing and looks like it is heading for a stabile future. As the news reached the forex market, the Australian dollar gained against the U.S. dollar and several other currencies.

Other news making the Australian currency appreciate is the recent stock rally in the Asian region and the fact that the Reserve bank of Australia recently cut interest to further stimulate domestic growth. At the moment, the Australian dollar is thriving even with the constant threat of the European debt crisis, which has harmed the currency in the past.

The Australian dollar appreciated just under half a percentage against the U.S. dollar and 0.3 percent against the Japanese yen.

The Brazilian real appreciated today on news that the government will aid domestic companies by lending money to exporters. The government decided to keep its dollar reserves and buy more of the U.S. currency to help boost domestic growth.

The current debt crisis in Europe has lowered liquidity circulating in the Brazilian economy. This is basically a precaution, if the global economy worsens, thus increasing the cost of funding, the Brazilian government will step in and ease the situation for local companies. The news made the real gain big in the forex market, the most sizeable gain was 1.1 percent against the U.S. dollar.

Although the real witnessed an appreciation today, the overall performance of the currency has been really bad. The Brazilian currency has declined over 8 percent against the U.S. dollar in the last 90-day period alone.

Europe’s main problem is that its leaders have failed to contain the debt crisis that first emerged in Greece and Portugal. The crisis has spread and reached the main economies such as Germany, who had problems selling bonds during November. The German government only managed to sell 65 percent of its target bonds worth around 8 billion US dollars.

Economists’ state that the crisis in Europe and the uncertainty it bares with it favors the US dollar as investors are looking for more stable investments. The excellent performance of the US dollar in the forex market and downfall of the euro makes US government bonds a sought after instrument to invest in.

Furthermore, the commodity markets are looking shaky as well as they are closely linked to global growth, which is uncertain due to the current sovereign-debt crisis.