Pessimism Dominates Markets again on Euro Zone Growth and U.S. Housing

By FXEmpire.com

Another wave of pessimism dominated markets on Tuesday after data from the U.S. housing market showed deteriorating activities in July, while growth in Germany and the Euro Zone disappointed investors, which spread fears over the outlook for global growth and pushed equity indexes lower, as traders targeted lower yielding and more safe assets.

The U.S. released the housing starts and building permits for the month of July, where both housing starts and building permits showed easing activities, as elevated unemployment, tightened credit conditions, and elevated foreclosures continued to weigh down on housing market activities.

Meanwhile, Germany reported growth that failed to meet estimates, while the Euro Zone also reported growth eased in the second quarter, which raised concerns over the outlook for global growth.

Stocks in the United States fell by opening on Tuesday, where the Dow Jones Industrial Average was down by nearly 0.70% to trade around 11,405, while the S&P 500 index was down by nearly 0.90% to trade around 1194. European stock indexes were lower as well before closing on Tuesday, where FTSE 100 was down by nearly 0.70% to trade at 5311 and the DAX was down by nearly 1.50% to trade around 5932.

The U.S. dollar rose slightly against a basket of major currencies on Tuesday, where the U.S. dollar index was trading at 74.00, compared with the opening level at 73.93. The Euro fell against the Dollar, where the EUR/USD pair rose to trade at $1.4391, compared with the opening level at $1.4436, and the British Pound rose against the Dollar for a fourth day, where the GBP/USD pair traded around $1.6389, compared with the opening level at $1.6377.

Gold prices gained on Tuesday amid rising concerns in markets, as gold rose to trade around $1774 an ounce, and crude oil prices dropped to trade around $86 a barrel.