Stock Markets closed negative for 4th day | Learn Forex | GoLearnForex.com

Stock Markets closed negative for 4th day

Written by article default Tuesday, 19 July 2011 15:48

USD Dollar (USD) – In forex trading, the U.S. Dollar strengthened against most of the major currencies amid concern American lawmakers will fail to reach a deal on the nation’s debt limit two weeks before the deadline, which decreases risk appetite among investors. Today, the U.S. Senate’s top leaders said the chamber will remain in session until lawmakers hammer out an agreement to raise the U.S. debt limit, even as President Barack Obama threatened to veto a proposal to require the U.S. government to balance its budget as part of a debt deal. It is important to understand that failing to raise the U.S. debt limit by August 2 would restrict an economy struggling to recover from the worst recession since the Great Depression. In addition, Fitch Ratings reiterated today that it would cut all defaulted Treasury securities if the government’s failure to raise the debt limit causes it to miss its bond payment. The Stock Markets closed negative for the fourth day as the Dow Jones fell by 0.76% and the NASDAQ lost 0.89%.  Crude oil fell the most in two weeks by 1.60%, closing at $96.10 a barrel. The main reason is that Europe’s worsening debt crisis will probably slow the economy. Gold (XAU) rose to an all-time high, gaining 0.62% and closing at $1,604 an ounce. This all-time high caps the longest rally in 31 years, as debt concerns in Europe and the U.S. boosted demand for the metal as a haven. Gold may even continue to gain as European and U.S. leaders aren’t striving to boost investor confidence in their economies. Today, the Building Permits is expected to rise by 0.61M as previously and the Housing Starts are expected to rise by 0.58M vs. 0.56M previously.

Euro (EUR) – The Euro declined against the USD on concern European leaders won’t take concrete steps to contain the region’s debt crisis at a summit in three days. The Euro continues to fall despite European Central Bank President Trichet’s quote that, "Europe can surmount its sovereign debt crisis. Naturally the Europeans can manage the issue and it is a question of will and determination”. Euro-zone leaders will meet in Brussels on July 21 to discuss the “financial stability” of the region. Trading below the resistance level of 1.4220 will keep the momentum negative for the pair, but if the pair breaks above this resistance level, it may reach the 1.4450 level again. Overall, the EUR/USD traded with a low of 1.3836 and with a high of 1.4281. Today, the German ZEW Economic Sentiment is expected to show -11.8 vs. -9.0 previously.

EUR/USD – Last: 1.4120

British Pound (GBP) – The Pound declined for a second day against the Dollar as a report showed U.K. housing prices declined in July - for the first time this year. The trend for the pair remains bearish if the pair maintains its resistance level of 1.6160. Overall, the GBP/USD traded with a low of 1.5901 and with a high of 1.6191. No economic data is expected today.

GBP/USD - Last: 1.6070

Japanese Yen (JPY) – The U.S. dollar traded unchanged against the Yen as the pair didn't succeed to break the 79.00 support level. If the pair succeeds to break the support level of 79.00, it may bring the pair to the 78.60 support level once again. No economic data is expected today.

USD/JPY-Last: 79.40

Canadian dollar (CAD) – The Canadian Dollar fell against its U.S. counterpart as stocks and commodities, such as Crude oil, declined on concern that European debt is on the rise, making lower-yielding currencies more attractive. The trend for the pair is still bullish. Today, the Bank of Canada is expected to hold the Overnight Rate at 1.00% as previously and to release a statement.

USD/CAD - Last: 0.9585