The greenback was trading a lot higher versus its peers just a few hours ago. However, the dollar is starting to weaken now, as risk taking is starting to kick in. The reality is that there has been a lot of pessimism in the markets in the past week of trading. Therefore, optimism is very much needed today.
There is expected to be positive employment and other economic data from the U.S. economy later today. In addition, traders are hoping for a stocks market rally to make up for yesterday’s declines.
The GBP/USD pair is marginally higher today by 0.1% at 1.5538. The dollar is also losing ground vs. the Swiss and yen in the latest round of trading.
The euro is headed for its worst weekly slump vs. the dollar in 6 months on signs that the Eurozone economy is suffering. The euro is down for a third consecutive day against the yen. Spanish output slid for the ninth month, according to figures publish yesterday.
The European Central Bank’s decision to cut interest rates yesterday to an all-time low shows just how dire the situation in Europe has really become. According to analysts, the economic fundamentals of the Eurozone look bleak.
The EUR/JPY is lower this morning by 0.1% to 98.96 yen. It is possible that there could be a bullish upturn for the European single currency today due to the fact that the euro has been oversold this week.
The yen fell a lot during Thursday’s trading session, which we said would happen: “The Asian stock market slump will lend a helping hand to the yen, as risk appetite has dissipated.”
The JPY is upholding its strength this morning due to a lack of risk appetite amongst traders. It has made some advances versus the euro and the USD.
It will be interesting to see if the Japanese currency can continue gaining ground vs. its peers today.
Asian stocks slumped for a second day due to sales at Samsung Electronics Co. missing estimates and due to a rate cut by the European Central Bank.
The MSCI Asia pacific Index recorded losses of 0.5% to 118.46. South Korea’s Kospi Index plummeted 0.9%. Japan’s Nikkei 225 Stock Average fell 0.7%. China’s Shanghai Composite Index climbed 1%, while Australia’s S&P/ASX 200 index slipped 0.3%.
Canon retreated 2.5% to 3,120 yen. Esprit Holdings Ltd. slumped 3.5% to HK$9.69. BHP Billiton fell 1% to A$32.09. Rio Tinto Group tumbled 1.5% to A$57.80.
The price of crude slid yesterday, just as we said would happen: “There may be further declines in crude prices today if the German Factory Orders data is negative. Therefore, traders should look into opening Put options as soon as possible.”
The commodity capped a bearish session on Thursday following the rate cut by the European Central Bank. ECB President Mario Draghi stated that there is further downside for the Eurozone economy, which hurt oil prices yesterday.
The slowing global economy and the pessimism in the markets have seriously hit oil prices this week. Crude oil is trading lower on the New York Mercantile Exchange by 83 U.S. cents at $86.39.Expect another day of losses for crude oil this Friday.
The German DAX Index experienced a very bearish trading session on Thursday on poor economic data and on the feeling that the state of the Eurozone economy will worsen. However, the index is set to make a bullish comeback later today, as traders realize just how oversold the commodity has been as f late.