The dollar open the final week of 2014 with positive momentum

Good Morning,

- The dollar open the final week of 2014 with positive momentum, as the euro flirted with two-year lows while investors awaited a key vote in Greece later today.

- Trading activity is likely to be thin this week ahead of the New Year's holiday and as many investors have already closed out their positions for the year.

- Jens Weidmann, a member of the European Central Bank's Governing Council and the president of Germany's Bundesbank, told a newspaper on Sunday that growth in Germany - Europe's biggest economy - might be better than expected next year, and that the situation in Europe is not as bad as many people think.

- Greek PM Antonis Samaras faces a vote in parliament that will decide whether the country goes to snap elections that could bring the leftwing Syriza party to power and derail an international bailout.

- BNP Paribas on EUR/USD: Policymakers will continue to dominate the foreign exchange markets in a busy H1 2015, says BNP Paribas. "Monetary policy divergence trades remain our favored strategies and the rhetoric has reinforced this as 2014 draws to a close. We expect downside in EURUSD and EURGBP, while USDJPY should rise, and we think the best performing trades will position for this," BNPP projects. Specifically for EUR/USD, BNPP still sees the start of quantitative easing by the ECB in 2015 which will start to close the balance sheet gap with the FED. Meanwhile, BNPP thinks the USD will lead the G10 FX Pack in 2015. "The USD will continue to find yield support: the spread between the two-year US Treasury yield and comparable German and Japanese bonds has reached new multi-year extremes...Anticipation of Fed policy tightening by Q3 of next year should continue to keep US front-end yields increasingly supported and yields are likely to become progressively “unglued” at shorter maturities as lift-off approaches," BNPP argues. "Given this, we think the EURUSD will begin its descent to 1.15," BNPP projects. In line with this view, BNPP maintains a short EUR/USD position in its portfolio going into 2015. The trade entered at 1.2520 with a stop at 1.28 and a target at 1.18.

- The greenback was steady at 120.30 yen, it’s ready to posed gains more than 14 percent in 2014. Top Japanese companies think the yen will not decline much further next year and may even stage a sizeable rebound despite the Bank of Japan's easing policies and PM Shinzo Abe's stimulus, a Reuters survey released on Monday showed. The survey, predicted an average 2015 low for the yen of 125 to the dollar, and a high of 112.

- Japan's government approved on Saturday stimulus spending worth $29 billion to help the country's lagging regions and households with subsidies, merchandise vouchers and other steps, which it hopes will boost GDP by 0.7 percent.

- The People's Bank of China plans to loosen loan-to-deposit ratios for banks from next year. China's economy is expected to grow by 7 percent in 2015, slower than the forecast 7.3 percent in 2014, a government think-tank, the State Information Centre said on Monday.

- Oil prices rose slightly on Monday, after dropping for the past two sessions, as escalating clashes in Libya stoked worries about supply from the OPEC member. A fire caused by fighting at one of Libya's main export terminals has destroyed 800,000 barrels of crude - more than two days of the country's output, officials said, amid clashes between factions battling for control of the nation. Brent crude was hitting $60.40 in earlier in the day. The benchmark settled down 79 cents in the previous session. U.S. crude rose to $55.69 after closing $1.11 down in thin trade on Friday.

Have a Week!