Binary Options News : August 9, 2012

USD Down and Stocks Continue Rise on Weak Chinese Data

US

The USD was down against most major currencies in Asian trading and stocks climbed again, as the world’s second largest economy – the Chinese – released price figures which showed that China’s inflation fell to a 30 month low in July, and consumer prices climbed at a slower pace for a fourth consecutive month, showing that the Chinese economy increased at its slowest pace in three years in the second quarter of 2012.

Consumer prices increased 1.8% in July from the previous year; down from a 2.2% growth rate in June and a 3% increase in May. The Chinese economy expanded at an annual rate of 7.6% in the months April to June, down from an 8.1% growth rate in the previous three months. There are fears that growth in the Chinese economy may slow down even further in the coming months which could prompt policymakers to introduce further measures aimed at boosting growth. China’s central bank, the People’s Bank of China, has cut its key interest rates twice since the start of June, taking the benchmark lending rate down to 6%.

Market Moves

The Hang Seng index was up 0.75%, the Nikkei 225 was up 0.80% and the S & P/ASX was up 0.11% whilst the US Dollar index which tracks the greenback against a basket of 6 weighted currencies was down 0.11% as the risk on sentiment continued which is bullish for stocks but bearish for the greenback. The EUR/USD was up 0.08% and the commodity linked AUD made up some of yesterday’s losses, by being up 0.26% against the USD

Outlook

The morning sees British and Italian trade balances announced with key US jobless and trade balance figures released later in the afternoon. When important data is published like today, markets take notice and there could be potential heightened volatility which will create more profit opportunities for the focused binary options trader today.

Meanwhile, the economy of France is expected to enter its second economic recession in three years, starting in Q3 of 2012 and going into 2013. According to analysis of the Banque de France (the Bank of France), France will be in recession this Autumn, that is to say starting in the third quarter. The first estimates of GDP growth in the third quarter (based on the monthly ISMA activity composite indicator) are rather poor. Having anticipated a decline in growth of 0.1% in the second quarter, the Bank of France predicts an identical contraction (0.1%) of GDP in the third quarter, which would result in a recession. The most recent in France occurred in 2009.

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