General Forex News

Pessimism continued to dominate global financial markets on Wednesday after China raised its benchmark interest rates by 25 basis points, while Moody’s Investors Services announced it downgraded Portugal by four notches to junk, which raised concerns once again over the outlook of the European debt crisis. Meanwhile, the ISM services index showed activities in the services sector eased below expectations. The ISM services index eased in June to 53.3 from 54.6 back in May and below median estimates of 53.7, which signals that economic weakness continued through the second quarter of this year, and this also casts more doubts over the outlook of economic growth over the third quarter of this year, since expectations show that economic activity will pick up in the second half of 2011. Stocks in the United States were lower by opening on Wednesday, where the Dow Jones Industrial Average was down by nearly 0.05% to trade around 12,563, while the S&P 500 index was nearly down by...

  Concerns from the European debt crisis continued to mount after Moody’s announced it downgraded Portugal’s credit rating to junk after signaling Portugal will need a second bailout because it can’t meet its debt targets. The news increased risk aversion in markets and pushed investors to target lower yielding and safe assets. This report outlined that Portugal might need to apply for another bailout package such like Greece. Panic in the markets might be triggered at any time, therefore caution will persist for a while, bringing gains to the safe heaven gold yesterday that rose above the $1515.00 level, while the dollar index rose today to the highest of 74.95. The euro fell today as Moody's signaled that Portugal will need a second aid package although it received one earlier this year. As the debt situation is getting more complicated in Europe, the euro might witness more losses. Tomorrow the ECB and BoE will make news, while on Friday the U.S. will release the employment...

U.S. stock markets fluctuated between gains and losses on Tuesday after a long weekend, where mixed feelings spread through financial markets, as risk aversion increased in markets amid speculations China will raise interest rates to battle upside risks to inflation, while Moody’s said bad loans in China could prove far worse than previously thought. Moreover, Standard and Poor’s said it will consider a rollover for Greek debt under the French proposal as a “selective default”, which increased concerns once again over the outlook of the European debt crisis. Moreover, factory orders in the United States rose in May by 0.8%, compared with the prior revised drop of 0.9% and slightly below expectations of 1.0%. Trading remains somewhat calm as investors are cautious ahead of key data from the labor market that will be released later this week, especially after stock markets enjoyed their best week in nearly two years. Stocks in the United States were mixed by opening on Tuesday, where the Dow...

  As full volume returned to the Forex and commodity markets today since trading was thin yesterday because of the Independence Day holiday in the U.S., fears over the global economic outlook reemerged. The global economic picture is now not only affected negatively by Europe's debt crisis and the slowing U.S. economy, but also by the questions about China’s prospects for growth since it’s the world's third biggest economy. A possible slowdown of China's economic growth could have a negative impact on the global recovery. Moody's warned about China’s bad loans that are posing a threat and the problem is being underestimated by Chinese officials. Concerns over the European debt crisis also resurfaced after the Standard and Poor’s said it will consider a French plan to rollover Greek debt as a “selective default”, which weighed down on the Euro as caution prevailed. Risk aversion may persist as later this week the ECB will hold their monetary policy meeting on Thursday while on Friday the U.S....

The market starts the week with volatility and fluctuations amid tight ranged trading with the absence of U.S. markets today for Independence Day celebrations. Investors greeted the week with upbeat news from Europe as the weekend meeting for the euro area finance ministers approved the release of the July tranche for debt-laden Greece easing jitters of default. This early morning sentiment was supportive for the market in the early hours and supported Asian stocks to move higher, especially as the market already reacted positively to the unexpected rise in U.S. manufacturing activity late Friday which bolstered exporters’ shares in Asia this morning. The Japanese Nikkei index ended the session today higher by 0.98% at 9,965.09 and Hang Seng added 1.66% to settle at 22,770.50. This upbeat sentiment failed to extend in the European session strongly, as the optimism started to lose momentum after Standard & Poor’s cut the long term rating on Greece to “CCC” from “B” citing that the plan to roll over...

The better than expected expansion in the ISM manufacturing index in the United States fueled optimism across financial markets, as investors’ concerns over the outlook of the world’s largest economy eased after the ISM confirmed on Friday the improvement witnessed on Thursday by the Chicago PMI. The ISM manufacturing index expanded in June to 55.3, better than the prior and expected estimates of 53.5 and 52.0 respectively, which supported confidence in financial markets and led investors to target higher yielding assets. On the other hand, the University of Michigan released the final estimate for consumer confidence in June, where consumer confidence was revised lower to 71.5 from 71.8 and below expectations of 72.0. Also, the construction spending index dropped in May by 0.6% in line with the prior drop and below median estimates of 0.1%, as housing market activities remained weak in May. Stocks in the United States rose by opening on Friday, where the Dow Jones Industrial Average was higher by nearly...

  Optimism continues to dominate markets since the Greek parliament passed the austerity plan that will help the country avoid a default, yet gains were limited after the disappointing PMI data from China, which signaled that manufacturing activities eased in June in the second largest economy in the world. Investors are still encouraged to target higher yielding assets today before going into the weekend, yet traders should note that this coming Monday the US will enjoy the Independence Day holiday, thereby volume will be thin and markets may witness sudden and volatile movements. The euro continues to rise against the U.S. dollar on optimism Greece will avoid a default. Greece is set to receive a second bailout from EU and the IMF, however the country must work hard to implement the austerity measures correctly since most certainly they wont be able to obtain a third bailout. The single currency is finding more support by the hawkish comments from ECB members, where it seems that...

Optimism continued to dominate financial markets on Thursday, as news emerged that German banks and insurers agreed on a plan that will help Greece avoid bankruptcy, while the Chicago PMI rose above expectations, which overshadowed the worse than expected jobless claims. The Chicago PMI was released for the month of June, where Chicago PMI expanded to 61.1, compared with the prior estimate of 56.6, and well above estimates of 54.0, where production and new orders increased in June, which sparked optimism that economic growth could pick up in the second half, although the employment index signaled more weakness after it eased in June. On the other hand, the jobless claims continued to signal ongoing weakness in labor market conditions, where jobless claims eased in the week ending June 24, to 428K from the prior estimate of 429K but above median estimates of 420K. Stocks in the United States rose by opening on Thursday, where the Dow Jones Industrial Average was higher by nearly...

  Optimism spread through the financial markets after the Greek parliament approved yesterday the austerity measures plan (a 78 billion-euro package of budget cuts and asset sales) in order to help Greece receive a bailout  from the IMF and EU to avoid bankruptcy. The dollar fell today to the lowest of 74.24. The vote on the package approved yesterday passed with 155 votes to 138 in the 300-seat parliament. Now Greece will be waiting the release of the fifth tranche of last year's 110 billion euros bailout. However the Greek government must pass another package of measures throughout a vote today. The prospects of restoring stability in the Greek, European and global financial markets spread optimism among the markets participants, increasing their demand on riskier assets. The euro gained significantly after the vote, dragging the GBP higher despite the lackluster data that UK still releases. The aftermath of yesterday's vote will be felt in the market today as well. Optimism is still felt within...

The gains of the US stocks could continue today after the Greek parliament had passed the planned austerities measures by the Greek government which had the acceptance of EU and IMF for giving Greece the second part valued 12 billions euros from their planned 110 billions euros nearly a year ago for supporting it. This required step by the lenders was very important for restoring back confidence in the markets which have suffered by the worries about the Greek debt recently as it is to help Greece to avert default over the short term because of the lenders insistence on having an agreement in the Greek parliament on these required measures in the forms of cutting the governmental spending, hiking the taxes and going forward in privatization public assets in Greece by lending it more funds. This acceptance could calm down the concerns about other European ailing economies by debt in the euro area such as Irelandand Portugalwhich required the IMF and...