Risk Assets Off Pace on Data Downgrade

The U.S. Dollar steadied close to a 1-week peak against a weighted basket of major currencies finding support ahead of a downgrade by Moody’s of sixteen major global banking firms, including Citibank, JP Morgan and Deutsche Bank. The greenback had staged a rally yesterday, the largest in more than three months, following a round of economic data releases which further confirmed a slowdown in the global economies.

As reported at 11:02 a.m. (JST) in Tokyo the U.S. Dollar Index was trading at 82.232 .DXY, following a gain of nearly 1% in yesterday’s session. The U.S. Dollar slipped back slightly against the safe haven Japanese Yen, dropping 0.1% after an earlier rally petered out. The Euro was trading at $1.2557, slipping back from the weekly high of $1.2478 which had been set on Monday.

The shift from higher risk assets came following news of a decline in China’s PMI manufacturing data; the HSBC preliminary read slipped to 48.1 from 48.4 in May. The Philadelphia Fed Manufacturing Survey also showed a sharp contraction in sentiment, dropping from -5.8 to -16.6, analysts had expected that there would be no change in sentiment from the previous month. The Australian Dollar dropped 1.3% against the U.S. Dollar, trading at $1.0054 and well off the Thursday peak of $1.0205.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.