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FX Highlights

-The euro rose against the dollar Thursday in Asia as investors paused from their recent massive euro-selling to adjust portfolios, reasoning that European debt worries stemming from Ireland's woes have subsided for the moment.

-In buying back the common currency, investors took a cue from the prospect that debt-ridden Ireland will avoid default. Before falling into bankruptcy, Ireland would ask the European Union for a rescue package that the EU is ready to deliver.

-The greenback was supported by buying orders from Japanese importers in Asian trading hours. But the U.S. currency is likely to weaken as European investors join markets later in the day. The reason is that U.S. Treasury yields, which have been rising and have been a major factor behind the dollar's recent strength, are now likely to start falling.

-The British pound gained on the US dollar and euro after a lower-than-expected drop in UK's unemployment claims and as average weekly earnings unexpectedly rose. The Office for National Statistics reported the number of Britons claiming for unemployment benefits fell by 3,700 in October, the first fall since July and debunking the expectations for a rise of 5,000.

-The Australian dollar pushed higher in Asia Thursday, though remains locked in a tug of war between euro area debt worries, still weak US data and some expectations of policy tightening in China, all combining to cap gains in cyclical currencies.

-Markets now await the white or black smoke announcing whether Ireland has decided to apply for assistance or not. From that perspective, investors' focus will be on ECB Trichet's speech at 0930 EST.

-Investors are watching Spain's bond auction later in the global day. A poor outcome could cause concerns over the region's debt to flare up, leading to sharp declines in the euro.

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