Binary Options News : October 10, 2012

US Dollar Up As Investors Seek Safe Haven

The US Dollar has been the go-to investment in overnight Asian trading as the markets sought a safe haven amidst growing concerns about a slowing global economy and heightened fears over a cooling Chinese economy.

Just a few days ago the World Bank said it expected the Chinese economy to grow by 7.7% for 2012, lower than its previously projected 8.2% made in May making it the slowest rate of growth since 2001 for the world’s second largest economy. Not helping the situation was the governor of China’s central bank pulling out of meetings between the IMF and the World Bank currently taking place in Japan. China’s four state-owned banks also pulled out following an ongoing territorial dispute between the second and third largest global economies.

Yesterday’s downward revisions by the IMF, which saw the international Monetary Fund downgrade its estimate for global growth in 2013 to 3.6% from the previously forecast 3.9% made in July. The IMF’s global growth forecast for 2012 was lowered to 3.3% from 3.5%, making it the slowest growth since 2009 and sparking demand for the safe haven dollar in a busy risk off trading session.

Currencies

The USD gained against nearly all other major currencies with the greenback up 0.21% against the EUR, up 0.08% against the GBP, up 0.14% against the CHF and marginally up (0.01%) against the JPY. The US Dollar index which measures the USD against a basket of 6 weighted currencies, was up 0.10%, trading at 80.17.

Stocks

The growing fears over the Chinese economy and the general fear concerning the global economy pushed investors away from Asian stocks with the regional benchmark index heading towards a one month low. Hong Kong’s Hang Seng was down 0.15%, Japan’s Nikkei was down 1.72% whilst Australia’s S&P/ASX200 fell by 0.37%.

Japan’s largest car makers continued from yesterday’s losses following their reports of falls in Chinese sales as the China Japan territorial dispute saw rioters burn down dealerships and smash Japanese cars. Toyota dropped 1.8%, whilst Honda Motor Co. fell 1.2%.

Commodities

Despite a strengthened USD, investors avoided risk and sought refuge by buying gold positions with Asian trading seeing the precious metal gain 0.04%, trading at 1765.45. Silver, Copper and Crude Oil all fell, down 0.34%, 0.22% and 0.30% respectively.

Today’s Outlook

Short term debt sales in both Germany and Italy are released and whilst not as important as long term debt sales, they should still be watched as can provide volatility in the EUR/USD pairing. A fall from -0.2% to -0.4% is predicted for Italian Industrial productions figures when they are released and this may well help towards the bearish nature of the EUR/USD.

European stock markets indicate a lower opening, whilst this afternoons focus will be on FOMC member Fisher speaking in the US.

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