The market is risk-on right now, but don't expect it to last.
For the next 48 to 72 hours, the markets are trading positive on the following: (no laughing out loud)
1. Hope for US politicians to make sound decisions on fiscal cliff.
(Read more: What Is the Fiscal Cliff? CNBC Explains)
2. Hope for European politicians to make sound decisions on Greece.
3. Hope for the US housing market will hold up despite slowing US growth.
4. Hope for structural changes to the Chinese economy with new leadership.
5. Hope for diplomatic efforts to reduce tensions in Middle East.
Given all this, we can add that Fed Chairman Ben Bernanke will be speaking today and espousing his new QE. All of this makes for a rally in risk and a drop in the US dollar likely over the next 3 days. A good example of the market shrugging off problems is what happened last night after Moody's downgraded France: EURUSD held support at 1.2760 and then rallied above its 200-day moving average at 1.2808.