Mixed Sentiments Dominate Markets, as Majors Fall against the U.S. Dollar

By FX Empire.com

Despite the earlier pessimism that dominated markets, yet U.S. stock markets erased earlier losses and rose in green after strong earnings from a number of U.S. companies boosted confidence in markets.

Pessimism spread earlier on Tuesday after China reported growth that disappointed investors, where the Chinese economy expanded at the slowest pace in two years, which raised concerns over the outlook for global growth, while Moody’s Investors Services said it is reviewing France’s Aaa rating and could put it under negative watch in the next three months, which spread pessimism over the outlook of the European debt crisis.

Meanwhile, the producer price index was released for September from the United States, where both PPI and Core PPI rose above expectations on rising food and energy prices.

As for FOREX markets, traders also shunned risky assets and target lower yielding assets, but majors erased some of the earlier losses after stock indexes gained in the United States, although the U.S. dollar remained generally higher.

Stocks in the United States were higher by opening on Tuesday, where the Dow Jones Industrial Average was up by nearly 0.20% to trade around 11,421, while the S&P 500 index was up by nearly 0.50% to trade around 1206. European stock indexes were mixed before closing on Tuesday, where FTSE 100 was down by nearly 0.70% to trade at 5398 and the DAX was up by nearly 0.13% to trade around 5866.

The U.S. dollar rose against a basket of major currencies on Tuesday, where the U.S. dollar index was trading at 77.44, compared with the opening level at 76.98. The Euro fell against the Dollar, where the EUR/USD pair traded around $1.3683, compared with the opening level at $1.3745, the British Pound also fell against the Dollar, where the GBP/USD pair traded around $1.5662, compared with the opening level at $1.5746, and the U.S. dollar fell slightly against the Japanese Yen, where the USD/JPY pair was trading around 76.76, compared with the opening level at 76.83.

Gold prices fell on Tuesday to trade now around $1638 an ounce and crude oil prices gained to trade around $87 a barrel.

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