Dollar rallied strongly on the opening day of the first full working week of the year as enthusiasm over President elect Obama stimulus package pushed the unit higher against the yen while the euro suffered a 300 point loss on worries over the burgeoning Italian bond scandal. According to the Independent in UK , Italian municipalities may face as much as Billion in losses over a financing scheme gone wrong, sold to the them by major investment banks such as UBS and Deutsche Bank. The Italian authorities are considering the possibility of suing the principal market makers or misrepresenting the risks to the municipal investors in these complex over the counter deals.

The greenback surges across the board in European session, riding on optimism that US President-elect Obama’s fiscal stimulus package will help US recover quickly from recession. Dollar index rises sharply to as high as 82.73 while USDJPY climbs to 93.38 so far. EUR/USD dives to as high as 1.3656. GBP/USD…

Stock markets in Tokyo, Shanghai and Hong Kong have a strong start to 2009 on hopes of fresh stimulus packages.