USD

The dollar has made important gains this morning against its main currency counterparts. In fact, it is trading higher vs. all 16 of its major peers, which comes on the fear that the European debt crisis is getting worse and on slowing Chinese growth.

The Dollar Index is trading at a 21-month high following the release of data that showed Chinese manufacturing grew less-than-forecast in the month of May. In addition, the European Central Bank and Germany have a lot of disagreements on how to rescue the Eurozone.

The EUR/USD pair is down this morning by 0.1% at $1.2357. The AUD/USD currency pair is trading lower by 33 pips at $0.9702. The dollar is also making significant inroads into the Canadian dollar and the British pound this Friday morning.

EUR

The euro made big losses yesterday, just as we said would happen: “The latest gains for the euro may only be short-term, as traders are wary of the European single currency.” The EUR/USD lost significant value on Thursday due to the ongoing debt crisis.

The euro has struggled to find steady gains in the past month. It has made big losses versus the dollar and the yen recently, as less confidence is placed in the European single currency.

The EUR/USD pair is expected to make additional losses in the current trading day. That may explain why selling the EUR/USD pair is such a popular trade at the present time.

JPY

The JPY rose to an 11-month high versus the EUR in the latest round of trading, as demand for safe-haven currencies continues to grow. The JPY is rising for the same reason as the USD, i.e. slowing global growth and a deepening European debt crisis.

At 5 p.m. New York time, the yen added 1% vs. the euro to 96.84 yen. This is after hitting the 96.5 yen level, the lowest rate since June 2010.

Asian stocks fell this morning in response to the weak figures from China and concerns about future growth.

The MSCI Asia Pacific Index retreated 1% to 111.43. Hong Kong’s Hang Seng Index fell 0.4%. Japan’s 225 Stock Average plummeted 0.9%. Australia’s S&P/ASX 200 Index dropped 0.8%. The South Korean Kospi Index declined 0.8%.

Sony Corp. fell 2.6%. BHP Billiton Ltd. retreated 1.8%. Other leading equities in Asia also recorded heavy losses earlier in Friday’s trading session.

Crude Oil

Crude oil fell on Thursday, as we said would happen: “The ongoing downward pressure on crude prices may lead the commodity to make further losses in the coming trading days.” Oil sank on higher crude supplies and on slowing U.S. and Chinese economies. In addition, the debt crisis in Europe has led to speculation that fuel demand will decline in the future.

The price of crude continues to go lower this Friday morning. It is trading 45 pips lower at $86.08. It seems that the commodity may be in for further losses later today. This is due to traders having a lack of confidence in what is known by many until recently as the black gold.

EUR/USD

The EUR/USD pair capped a bearish session on Thursday, as we forecasted yesterday: “However, despite the recent gains, the EUR/USD may decline later on this Thursday.” The EUR/USD is set to make another day of declines due to the constant downward pressure on the European single currency.