After yesterday’s German auction and today’s French auction markets turned pessimistic and the Euro slipped below $1.28, where France’s borrowing cost surged again, while demand for the French securities was weak, which raised fears in the market that France, the second largest economy in the euro-area region, could lose its AAA credit rating soon.
Fears started growing this week that euro zone leaders might fail to find a comprehensive solution to the debt crisis which could drag the region into a deep recession and infect the global economy especially after Greece warned it might exit the euro zone if the country won’t get more financing.
In Europe stocks fell where the DAX lost 0.25% while CAC 40 fell 1.5%, as the rising worries over the euro zone’s crisis prompted investors to be more cautious, increasing demand on the safe haven USD which is trading as of this writing around the 80.91, adding to the downside pressures imposed on the euro which is trading around the 1.2788.
The pound was also dragged downwards trading around the 1.5480, while the AUD fell around 1.0260 as demand on the higher yielding assets dropped. However the yen managed to lose the early gains after the USD strengthened today, trading around the 77.14 level.
Commodities are mixed, as crude oil lost the early gains seen after Europe agreed to ban oil imports from Iran yet no date was set, now crude is trading around $102.83 falling from the highest $103.72. Gold is stronger trading around the $1614.40 as its safe haven appeal rose and China’s possible seasonal buying.
Originally posted here
