Forex News – Worries Fueled by the Faltering Global Economy
By ForexMansion.com
As investors started worrying about the US economy, fears started spreading within the broad markets amid speculations the global economic recovery is losing momentum as the support that has been given so far from the U.S. is dropping.
The US economic data played a vital role yesterday in setting a wave of safe heaven trading. The ADP employment change and the ISM manufacturing numbers were both disappointing, fueling believes the U.S. economy is on the verge of a new downturn.
These results weakened the outlook for tomorrow's official non-farm payrolls report, which will keep investors in a cautious mode till Friday. In the meantime Europe is not helping investors feel more confident, as Greece's debt crisis persist and the economic data from the region continue to be lackluster.
Markets will be awaiting the final decision regarding Greece's aid package by the end of June. Till then sentiment will remain fragile and any developments could trigger a wave either up or down in global markets. Even the commodity markets have been witnessing mixed results.
In light of these developments the US dollar has been loosing value today on risk adverse trading, especially as volumes may be rather light as several European nations are celebrating a holiday and Europe will be very light with data today.
The US will release today the weekly jobless claims report and the factory orders for April, both expected to fall from their previous readings, which could fuel even more worries about the global economy and increase demand on safe heaven, driving the CHF, JPY, gold and even the AUD higher.
Although Australia released a disappointing GDP report this week, the economy seam to remain rather stable in comparison with its counterparts therefore demand on the currency persist. The dollar index fell today to the lowest of 74.47, while the euro hit the highest at 1.4440, and the pound reached the highest at 1.6381.
Oil is trading above the $100.00 a barrel possible disappointing data today may send it back below this level on speculations demand may weaken if the global recovery will show more signs of faltering. Gold is trading as of this writing around the $1540.00 an ounce.
