Broad markets turned cautious on Tuesday as bourses experienced lackluster results and declines. The USD emerged stronger against the EUR as Sovereign Debt talk ramped up as the E.U. announced that they have agreed on a debt relief emergency fund – the details of which will be released relatively soon. Having said this, the EUR remains within the stronger parts of its range against the USD. The GBP traded upwards yesterday versus the USD as CPI data came in above expectations. The higher than anticipated inflation results certainly led some investors into buy positions with the Sterling on the belief perhaps that the Bank of England may have to increase interest rates to combat the rise in some consumer prices. However, with poor growth still very much a part of the U.K. landscape and its prospects muted, the debate about the possibility of an interest rate hike is heated.
The U.S. will release New Home Sales today. The U.K. will publish the Bank of England’s MPC Meeting Minutes. Europe will bring forth Industrial New Orders. All three economies – the U.S., U.K., and Europe continue to face hurdles. Inflation and aspects of consumer spending both hang over the long term outlooks for these major economies.
International news continues to be prominent going into today’s Forex sessions. Japan has tried desperately to create stability within its nuclear reactors, but new details about radiation have found their way into the press. The JPY remains in a consolidated range and its trading presents difficult questions taking into consideration the shadow that the Bank of Japan emits due to its pronounced stance on further intervention. The JPY is within the stronger parts of its range presently and is being watched by many investors worldwide. The cost of rebuilding infrastructure was reported this morning to now be around 300 billion USD in future costs. Unfortunately the impact on exports has not been factored into the equation concerning GDP as of yet. But it is known that several countries are closely looking at putting safe guards into place to make sure food and technology that are being imported from Japan face tighter scrutiny because of possible contamination fears. This does not paint a rosy picture for Japan’s prospects.
The AUD remained within the higher ranges of its value also on Tuesday. Gold has been in a consolidated pattern for a few days since coming up off of lows. The price of Gold as of this writing is around 1430.00 USD an ounce. Crude Oil continues to find a bit of upward mobility on the continuing saga from Libya and the Middle East. The price of grains traded cautiously from Chicago on Tuesday as an important crop reports looms in the States next week.
The broad markets have proven to be cautious in the past twenty four hours, as investors appear ready to sit on the fence until more clarity comes into focus regarding the major risk events that are happening internationally. FX markets are nervous and are reacting swiftly to speculation coming from a complex web of avenues.
Written by bforex.com
