The USD made gains against most of the major currencies as Spanish concerns continued to weigh upon investors seeking a safe haven. Fears that the Spanish situation will only get worse were fueled by yesterdays debt auctions which saw yields and cost of borrowing reach nearly 7% and talk of more rescue funding being needed from a government already battling enormous borrowing costs, record unemployment and falling retail sales. The Spanish woes sent Asian stocks down with Hong Kong’s Hang Seng Index down 2.20%, Australia’s S&P/ASX200 falling 0.90% and Japan’s Nikkei 225 Index dropped 0.98% at time of writing.
Gaining in Asian trading was the greenback, enjoying its safe haven status and rising in most major currency pairs. The USD was up 0.28% against the EUR, trading at 1.2468 and was up against the GBP, increasing 0.17%, trading at 1.5615. Against the commodity linked Aussie, the USD was up 0.50%, trading at 0.9799. The AUS generally does better when the commodity markets increase, which wasn’t the case this morning. After enjoying a bounce yesterday during European trading, the commodity markets saw falls. Gold and Silver both declined – Gold down 0.15%, trading at 1548.75, whilst Silver fell 0.54%, trading at 27.653.
The other news dominating financial headlines was that Facebook shares fell below $29 for the first time since their launch at $38. One reason for the fall in shares since its initial public offering (IPO) is that Tuesday was the first day that options on Facebook stock began trading. Options are a form of derivative, which enables bets on the future direction of the stock. It appears that most investors are betting Facebook shares will head lower.
Today, European stocks indicate a lower opening and there should be increased volatility when In Europe, European Central Bank President Mario Draghi is to speak later today and in the US pending homes sales figures and numbers on mortgage applications are released.
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