The Australian dollar and the Canadian dollar rallied against the US dollar on news of the European stock market recovery and comments from various officials pledging their support for continued government stimulus.

The rally started around the beginning of the Asian session and is continuing into the US session.

The AUD/USD rallied from 0.9172 at 1:30 am in London to 0.9278 at 2:30 pm, gaining 105 pips. The USD/CAD rallied 66 pips, from 1.0313 at 1:30 am in London to 1.0247 at 3:00 pm.

The German DAX rallied from a loss of 120.6 points last Friday to trade up 40.28 points, or 0.7%. The UK FTSE 100 rebounded from a loss of 42.8 points on Friday to gain 41.7 points, or 0.8%.

The London Stock Exchange was led by commodities stocks such as Heritage Oil (LON:HOIL) and Anglo American (LON:AAL). Heritage Oil may sell its oil license blocks in Uganda and Anglo American is prepared to sell its zinc assets.

February crude oil futures are up $0.44, or 0.56% in London. It traded as high as $78.68.

Earlier today in Japan, IMF Managing Director Dominique Strauss-Kahn cautioned against an early withdrawal of liquidity and government stimulus, according to the Wall Street Journal. Strauss-Kahn stressed the importance of government-support in an economic environment where the private sector is still weak.

The IMF said on January 14 that the global economy is recovering faster than expected, but advised leaders against relaxing government stimulus measures.

Bank of Japan Governor Masaaki Shirakawa also reiterated today his commitment to easy monetary policy.

Uganda International Monetary Fund