Growing sentiment increased amongst investors that global policymakers, especially European ones, are set to take more coordinated steps to tackle the global debt crisis, boosted markets, after a disappointing start to the trading week on Monday.
European Central Bank Governing Council member Ewald Nowotny said yesterday that he supported considering the notion of forming a European banking union. This provided support for the the euro and higher-yielding currencies as well as sending global stocks up too. Nowotny’s comments before the Group of Seven conference on the debt crisis, fueled sentiment that the world is viewing an apparent synchronized downturn with more urgency and is ready to take more direct action. Both the Federal Reserve and the European Central Bank are set to address monetary policy later this month, and talk of policymakers rolling out stimulus measures to move the global economy away from downturn increased in early Asian trading, especially following on from May’s disappointing U.S. jobs report.
The EUR/USD bounced up 0.22%, trading at 1.2525 whilst the USD/CAD was down 0.23%, trading at 1.0371 as the price of Crude Oil increased pushing the value of the oil sensitive Canadian dollar up. The commodities market enjoyed healthy gains in the Asian trading with Gold climbing 0.39%, valuing the previous metal at 1620.05 and Silver was up 0.76%, valuing it at 28.220 a troy ounce.
Today promises to be a volatile day of trading with bottom feeders already in play snapping up nicely priced Asian equities. There is plenty of data coming from Europe in the morning, including German Factory orders and Eurozone PMI. Then in the afternoon, focus should switch to North America with FOMC Fisher speaking in the US and Canadian Interest Rate decision.
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