By ForexMansion.com
Despite the prevailing uncertainties, investors are stubbornly determined to maintain a certain kind of stability within the financial markets and seek riskier assets. Fundamentals and news are no longer grabbing the investors’ attention.
Risk events continue to develop in Japan, Libya, the Middle East and Europe, but the focus now seem to be shifted towards the US which tomorrow will release the Non Farm Employment Change, spurring confidence among market participants on expectations the US will be hiring more workers in March.
Europeappears to be in a debt storm, but the possibility of the ECB raising their interest rate built a strong foundation for the euro. Supporting these believes was a report today showing inflation in the Euro zone unexpectedly rose by the fastest pace since 2008 by 2.6%, increasing pressures on the policy makers to tighten their policy.
Yet another support was given to the euro from the German unemployment report, which showed that the debt crisis, Japan’s struggle and the Libyan military conflict did not prevent Germany from witnessing a decline in its unemployment for the 21st straight month.
As exports and domestic demand are growing, the biggest economy in the Euro zone seems to be performing really well. The euro rose today above the 1.42 level, dragging with it the pound above the 1.61 level, although investors await the release of the Irish banks stress test, while the dollar index fell as low as 75.65.
Although Asian stock markets gained today on hopes global recovery might boost demand for exports, the yen is still caught in a tight range around the 83.00 level on believes BoJ will not be able to follow the other central banks when raising rates as the manufacturing sector deteriorated at the fastest pace in nine years.
Investors continue to leave themselves a back up door in case news turn out to be very bad, therefore demand for the safe heaven gold prevails, surpassing the 1430.00 level. As the heated Libyan conflict raised fears of a longer disruption in oil supplies, crude prices rose today above the 105 dollars per barrel level.
Originally posted here
