Forex News
With equity markets falling globally, investors have sought U.S. Treasuries and the safe haven assets; gold, the Swiss Franc and the Japanese Yen, and to some extent the U.S. Dollar, have all been pushed higher.
A day after the Swiss National Bank intervened in their currency’s rise and the Swiss Franc is continuing to fall lower against the U.S. Dollar and the common currency Euro in Asian trading largely, however, a factor of investors’ speculation that the SNB will dump more liquidity into the forex forwards market.
Following yesterday’s Sarkozy/Merkel summit which failed to yield any promise of the creation of a Eurozone bond scheme, the Euro sank against the U.S. Dollar. Also hurting the common currency was unexpectedly weak German GDP data.
Although the GDP in the Eurozone rose 0.8% in the first quarter, new reports reveal that it rose just 0.2% in Q2 2011, the worst performance in the region since late 2009.
The Euro attempted to hold onto the 1.3% gain made during yesterday’s trading session but news of slowing growth in Germany, the economic driver of the Eurozone, is sending the Euro lower.
In early Asian trading, the common currency Euro and the U.S. Dollar rose against the Swiss Franc as investors proceed cautiously, in the even the Swiss National Bank follows through on its intervention threat.
The Swiss Franc suffered heavy losses against the U.S. Dollar and the common currency Euro earlier during the Asian trading session, a repercussion of the Swiss National Bank's efforts to suppress the Swiss currency's rise.
As the European equity markets open higher for trading, the common currency is also higher against the U.S. Dollar, trading most recently at 1.4236, but is still viewed as vulnerable to selling pressure as investors worry that the Eurozone’s fiscal crisis may be spreading to France.
Ahead of the Federal Reserve’s unprecedented pledge to hold interest rates at the current record for a minimum of 2 years, the U.S. Dollar had edged up against the commodity-linked Australian Dollar.
The fallout from the U.S. downgrade continues at a rapid clip; a full 24-hour cycle has passed, with Asian, then European and finally, U.S. markets all suffering from sell-off fever.
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