By FX Empire.com

A slight wave of optimism spread through global financial markets earlier on Tuesday, after rating agencies Standard & Poor’s and Moody’s Investors Service confirmed that the credit rating of the United States will remain intact, which ease fears that ignited a huge wave of pessimism on Monday, as the “super committee” responsible for reducing the budget deficit in the United States failed to reach an agreement.

Nonetheless, the optimism that dominated markets soon started to fade, as concerns from the European debt crisis persisted in market, where yielding on European governmental bonds continued to rise. Moreover, the U.S. Commerce Department released the second estimate for Gross Domestic Product for the third quarter, which showed that economic growth eased to 2.0% from the prior and expected estimates of 2.5%, which put negative pressure on investors’ confidence, and forced them to shun risky assets.

Also, Canada reported better than expected retail sales for the month of September, as retail sales rose by 1.0%, better than median estimates of 0.5%, while retail sales also beat estimates of 0.4% after rising by 0.5% in September.

The U.S. dollar was depreciated against a basket of major currencies on Tuesday, where the U.S. dollar index was trading at 78.18, compared with the opening level at 78.41. The Euro slightly gained against the Dollar, where the EUR/USD pair traded at $1.3517, compared with the opening level at $1.3483, the British Pound also gained slightly against the Dollar, where the GBP/USD pair traded around $1.5656 compared with the opening level at $1.5637, and the U.S. dollar extended its gains against the Japanese Yen for a second day, where the USD/JPY pair was trading around 77.01, compared with the opening level at 76.93.

Stocks in the United States fell by opening on Tuesday after fluctuating earlier, as the Dow Jones Industrial Average was down by nearly 0.25% to trade around 11,520, while the S&P 500 index was down by nearly 0.15% to trade around 1191. European stock indexes were mixed before closing on Tuesday, where FTSE 100 was up by nearly 0.40% to trade at 5243 and the DAX was down by nearly 0.40% to close around 5584.

Gold prices rebounded to the upside on Tuesday to trade now around $1700 an ounce and crude oil prices gained as well to trade around $98 a barrel.

Originally posted here