Forex News – Uncertainties Fuel Volatility Pushing Gold to Record High |
While the stock markets failed to hold to yesterday's gains, the currency and commodity markets are gaining momentum following the Fed's Chairman Ben Bernanke signaling the Feds could still undertake a third round of quantitative easing (QE3), which triggered fireworks.
The U.S. dollar index weakened considerably against most major currencies, especially after Moody's rating agency announced it had put the U.S. debt rating on review for possible downgrade if the current administration will fail to come to an agreement with the Congress.
It is clear that the broad markets are dynamic, the uncertainties are abundant, and the confusions about the global economic outlook are persistent, therefore sentiment is fragile and news coming from any direction is creating volatility within the Forex and Commodity markets.
The fears triggered by the European debt crisis that might spread throughout the region including Italy and Spain will continue to keep investors uncomfortable. Today the U.S. will release its weekly unemployment claims, the retail sales numbers, and the PPI, while Bernanke will testify for the second day.
Europewas light with data today, releasing only the CPI numbers which came inline with expectations on the yearly basis, yet markets await tomorrow's stress test results. There will be no significant data from the U.K. in the next two days, thereby the pound will be moving within the euro centric mode.
Gold continues its upside rally on rising concerns over the debt crisis contagion worries that threatens the financial stability, increasing demand for safe heaven. Thereby gold managed today to reach a new record high at $1593.17 per ounce, while oil is trading above the $98.00 level on dollar weakness.
The dollar index is hovering around the 95.00 level, while the euro is consolidating around the 1.4200. The pound is trading around the 1.6100 level, while the yen got weaker trading around the 79.00 level on believes BoJ may interfere to weaken its currency.
Originally posted here.
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