By FX Empire.com
Despite the new governments in Italy and Greece, the rising uncertainties over the debt crisis are intensifying concerns over the outlook of the European economy, weighing down on risk appetite.
As yields on Italian and Spanish bonds continued to rise, traders are more worried from the euro zone debt crisis. Italy’s ability to repay its debt is questioned, indicating that Europe still faces many obstacles ahead.
The rising risk aversion continued to support demand for lower yielding assets providing the safe haven USD with more bullish momentum, to extend its gains against major currencies.
Since the European debt crisis will continue to dominate the global financial markets, sentiment may weaken even more throughout the day, ignoring the economic data expected during today’s session.
The Asian stocks drop on worried the debt crisis is worsening, where Nikkei 225 fell by 0.72% while Hang Seng fell by 0.82% at closing. In Europe, FTSE 100 fell 0.72% while DAX fell 1.83% and CAC 40 fell by 1.63% as of this writing.
The greenback is trading as of this writing around 77.85 compared with the opening at 76.46. The US data might provide traders with some hope today with the release of its PPI, along with the retail sales and empire manufacturing.
Europe is also abundant with economic data today, as Germany released its Q3 GDP that exceeded expectations and a better than expected ZEW survey, while UK’s yearly CPI fell to 5.0%. In EU the GDP matched expectations and the trade balance deficit widened in Sep.
The euro is trading as of this writing around 1.3548 after falling from the highest today of 1.3640, while the pound is trading around 1.5860 after falling from the highest of 1.5930. the yen is almost unchanged at 77.05.
The AUD also fell today, trading around 1.0150 from the highest today of 1.0225, after the RBA minutes indicated that cutting rates by 25 basis points came on easing inflation risks and rising downside risks to global growth.
The rising USD continues to impose downside pressures on commodities today. Thereby oil is trading in a tight range round $98.05 per barrel, while gold widened its losses to trade around $1765.15 per ounce.
Originally posted here
