Forex News

  While the stock markets failed to hold to yesterday's gains, the currency and commodity markets are gaining momentum following the Fed's Chairman Ben Bernanke signaling the Feds could still undertake a third round of quantitative easing (QE3), which triggered fireworks. The U.S. dollar index weakened considerably against most major currencies, especially after Moody's rating agency announced it had put the U.S. debt rating on review for possible downgrade if the current administration will fail to come to an agreement with the Congress. It is clear that the broad markets are dynamic, the uncertainties are abundant, and the confusions about the global economic outlook are persistent, therefore sentiment is fragile and news coming from any direction is creating volatility within the Forex and Commodity markets. The fears triggered by the European debt crisis that might spread throughout the region including Italy and Spain will continue to keep investors uncomfortable. Today the U.S. will release its weekly unemployment claims, the retail sales numbers, and the...

Bernanke sparked a huge wave of optimism in financial markets on Wednesday after he signaled in his semi-annual testimony before the House of Representatives that the Federal Reserve Bank is ready to undertake a third round of quantitative easing (QE3) if economic growth weakens further over the coming period, as Bernanke signaled that the recovery remains moderate so far, while unemployment remains rather elevated, and inflation seems to be easing. Stock markets in the United States and Europe rose on Wednesday, as traders targeted higher yielding assets, which also boosted commodities including crude oil and precious metals, as gold prices hit a new record high amid the dollar’s weakness. Bernanke’s testimony overshadowed mounting fears from the European debt crisis, as traders are concerned that the debt crisis will spread to Italy, the Euro Zone’s third largest economy. Nevertheless, Bernanke’s pledge that the Fed will do everything possible to make sure economic growth picks up pace was still the dominant headline in markets. Stocks...

  China’s economic growth in the second quarter managed to end the sharp selloffs that were triggered in the markets this week. the Chinese economy expanded by an annualized 9.5%, above the median estimates of 9.3%. This spread optimism across the broad markets and the safe heaven dollar lost pace. The better than expected growth numbers from China increased believes that exports will remain strong, compensating for the fears triggered by the European debt crisis that might spread throughout the region including Italy and Spain, and the U.S. pessimistic recovery outlook. However caution will certainly prevail as traders are still concerned over the outlook of the European debt crisis while the overall global economic conditions are still weak. Thereby demand for the low yielding assets including the dollar and the yen may be triggered at any moment. Europe released a negative industrial production today while U.K released a lackluster jobs report for June, which added to the downside pressures on the GBP, yet the relief...

It seems all bets have been placed on the EUR/USD support level at $1.4000, as the Euro dropped to this level from $1.4217 in only one day – such a drop hasn’t been seen since June 15. Given the current volatility and thin market, we shouldn’t expect to see the Euro break this support level as quickly as it may seem poised to do at first glance. Given the uncertainty surrounding the seriousness of Euro zone peripheral countries’ budget deficit, the market is dumping the Euro against 17 other major currencies. China has come to the rescue – the deputy chairman of the People’s Bank of China was invited to a meeting yesterday with representatives from the German Bundesbank in Frankfurt and immediately announced that China still “believes in the Euro” and supports “all measures taken by the European Union, the European Central Bank, and the International Monetary Fund in order to resolve the government debt crisis.” Deep Trust Trading...

Pessimism continued to dominate global financial markets on Tuesday, where traders were still worried from the European debt crisis amid speculations Greece could still be forced to a selective default, in addition to fears that the debt crisis will spread to other nations in the Euro Zone including Italy and Spain. The pessimism had drove higher yielding assets to drop earlier today, where lower yielding assets including the U.S. dollar and the Japanese Yen gained against most major currencies, nonetheless, the U.S. dollar lost some of its momentum after the trade balance in the United States showed a larger than expected deficit, where the U.S. trade deficit widened to $50.2 billion, compared with the prior deficit of $43.6 billion and worse than the expected deficit of $44.1 billion, which weighed down on the U.S. dollar, and led other majors to trim their earlier losses. Stocks in the United States though fluctuated between gains and losses by opening on Tuesday, where the Dow...

  Contagion fears not only continue in Europe but have actually grown. The European debt crisis might spread from Greece, Ireland and Portugal to Italy and Spain. And combined with the poor jobs report from the U.S. and China's rising inflation, heavy selloffs were seen across the board. The European finance ministersfailed after their meeting in Brussels yesterday to ease the fears since no quick fix or clear commitmentwas shown. Meanwhile the new IMF chief added to the worries after saying that the IMF is not ready to discuss the second bailout for Greece. This ignited fears from a possible default by Greece and the markets started pricing such a scenario especially since Italy is now threatened by Greece's possible default and is on the edge of collapse. Thereby the euro extended its heavy losses as investors continue to avoid risk and look for safe heaven. The euro fell as of this writing to the lowest of 1.3835 from the highest today of 1.4061,...

Pessimism continued to dominate investors with the start of the new week, where investors were still concerned over the outlook of the U.S. economy after the jobs report last Friday showed weak job growth in June, while jitters from the European debt crisis mounted with Italy now topping the headlines. Investors fear that the European debt crisis will spread to the Euro Zone’s third largest economy, where EU officials are meeting in Brussels to discuss the European debt crisis and Italy’s situation, where investors fear that Italy will be the latest victim of the EU debt crisis. Rising fears in markets increased demand for lower yielding and safe assets including the U.S. dollar, the Japanese Yen, and gold, while investors shunned risky assets including major currencies, equities, and commodities including crude oil. Stocks in the United States extended their losses by opening on Monday, where the Dow Jones Industrial Average was down by nearly 1.10% to trade around 12,517, while the S&P 500...

    Since contagion fears are growing in Europe determining the European officials to hold an emergency meeting in Brussels today, confidence has evaporated from the markets and the safe heaven dollar has been pushed aggressively to the upside alongside the yen. The European and Asian stock markets fell today while the euro slid to a two weeks low on fears the European debt crisis might spread to Italy, where there is a disagreement between the Italian Prime Minister and the Finance Minister which could threaten the passage of a 40-billion euro deficit-reduction plan. The Euro Zone debt crisis contagion and the global economic slowdown fears hurt investors' appetite for risk, thereby the euro was driven aggressively to the downside hitting the lowest of 1.4115 as of this writing while the pound is trading around the lowest of the day at 1.5944. The dollar index is trading above the 75.60 level as of this writing while the yen is consolidating around the 80.70 level. Fears from...

A huge wave of pessimism dominated global markets on Friday after a disappointing jobs report from the United States showed job growth remained weak in June, while unemployment rose unexpectedly above expectations, which forced investors to shun risky assets and target lower yielding and more safe assets. The U.S. jobs report for June showed that Non-farm payrolls increased only 18,000 jobs well below forecasts of 105,000 added jobs, and following a revised 25,000 added jobs back in May, while unemployment rose to 9.2% from 9.1%. Investors were feeling optimistic ahead of the jobs report, since the ADP employment report released on Thursday suggested that private employers in the United States added 157,000, nonetheless, the jobs report showed that private payrolls increased by 57,000 jobs in June well below forecasts of 132,000 added jobs. Stocks in the United States fell heavily by opening on Friday after the huge disappointing Jobs report, where the Dow Jones Industrial Average was down by nearly 1.10% to trade...

  Markets are focused today on the U.S. jobs report, and since the U.S. is expected to add more jobs in June than the previous month, gains where seen within the Asian and European stock markets on Friday. The strong ADP employment report yesterday sparked optimism among traders for today's infamous jobs report which is expected to show that the U.S. economy added 105,000 jobs in June from 54,000 in May. A strong Non-farm payrolls number will most likely support confidence in markets and boost demand for high yielding assets, lowering demand on safe heaven, including gold which fell as of this writing to the lowest $1525.10. Yesterday the ECB delivered the a rate hike while BoE maintained its monetary policy firmly in place. As expected Trichet refrained from signaling an August rate increase yet he confirmed the ECB will suspend the collateral rules for Portugal. Markets will continues to trade with a mixed sentiment awaiting the U.S. report, where the dollar index is consolidating...