The USD bounced back in late trading on Tuesday after giving up some of its gains earlier on Tuesday. The Greenback continues to build on risk adverse sentiment that is being generated from the European Union. Greece was back in the news late in the evening as it became apparent that political tensions within the government may lead to early elections. This would certainly put the question about austerity measures front and center for Greek citizens and allow them to choose ‘the best’ direction for their own country. While ECB and IMF officials continues the dogmatic statements that ‘Greece will not restructure’, the view investors continue to take is that concerns are well founded. The possibility for an election in Greece could open a proverbial can of worms. One thing is for certain, investors hate uncertainty. While Greece may need time to ‘fix’ its problems, investors also are often an impatient bunch.
Gold maintained its pace on Tuesday and gained in the face of uncertainty in the Forex markets. The broad commodity markets continue to turn in mixed results. This is highlighted by the trading of Glencore which has begun trading in London and Hong Kong. One of the biggest commodity trading companies in the world, Glencore’s IPO prices have been put slightly under pressure. This may have more to do with overall equity weakness throughout global bourses, but the sudden mixed bag of values coming from physical commodities have done the massive trader no favors. Gold as of this writing is 1521.00 USD per ounce. The AUD has slipped against the USD a bit further and it is showing that not all ‘long time friends’ are trading in tandem.
The GBP actually maintained its ground on Tuesday and although this does not signal a sudden divergence from the EUR, investors have to be wondering if Sterling will begin to outperform the Single Currency if the European Union’s debt woes are not solved. The U.K. will release Revised GDP numbers today and a gain of 0.5% is expected. BBA Mortgage Approvals data will also be brought forth. Public Sector Net Borrowing figures yesterday proved disappointing as they missed their expectations. The GBP may be widely under a EUR centric shadow, but it must be monitored for its own signs of life. Today’s GDP report could be important.
Europe will be relatively quiet with data today. The U.S. will present Core Durable Goods results. Data from Europe and the U.S. on Tuesday proved a mixed bag. While the German Ifo Business Climate reading was slightly better than anticipated, the European Industrial New Orders report was not positive. The States turned in better New Home Sales, but the outcome does not represent some massive change in sentiment. Also the Richmond Manufacturing Index was negative.
Wall Street continued its slump on Tuesday. Investors globally are showing duress from the European debt situation and concerns about the global outlook for economic growth. Risk adverse trading has come to the fore and while officials try to create an air of confidence investors appear to be skeptical.
The JPY continued its consolidated move yesterday. Japan has many eyes examining its troubling balance sheets. The JPY has done remarkably well for a long duration as it has held onto its value and traded stronger in many instances, but the question is how long can the JPY keep this up?
Written by bforex.com
