Binary Options News : October 31, 2013
Dollar Boosted As Fed Maintains Status
The US Dollar gained in overnight Asian trading as the conclusion of a two day FOMC meeting saw the US Federal Reserve vote to keep interest rates at their record lows and to continue with its $85bn a month asset purchasing scheme.
The statement after the interest rate decision acknowledged that whilst the Fed was no longer concerned about raising rates, the housing sector had slowed recently, possibly due to the higher rates. Over the summer, US mortgage rates spiked as banks and consumers showed concern that the Fed ending its bond purchasing programme could see the end of easy money.
In Europe yesterday, amid a busy day of economic data being released, Spain saw its first quarterly economic growth, with GDP rising 0.1% since 2011, after having 9 consecutive contractions. Spain is one of the PIGS countries needing a bailout one of the worst economically hit countries with record unemployment and street riots. Yesterday’s statistics now mean that Spain is officially out of recession.
Asian stocks were mixed in overnight trading following on from a tepid response by US stocks to the statement and decision by the Federal Reserve yesterday. Hong Kong’s Hang Seng dropped 0.36% and the Chinese Shanghai Composite fell 0.65% despite the People’s Bank of China adding liquidity into China’s financial system. Japan’s Nikkei 225 fell 1.20% despite the Japanese Ministry of Health, Labour and Welfare reporting that Japan’s average cash earnings increased 0.1% in Q3 after a 0.9% fall in the previous quarter.
The US Dollar made gains in overnight Asian trading despite the stocks boosting Fed reserve decision yesterday, as the noises coming from the Fed were expected and factored into trading. The USDr was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.11%, AUD/USD down 0.12% and the NZD/USD down 0.31%. The EUR/USD was down 0.22%, the GBP/USD down 0.19% and the USD/JPY down 0.17%.
Crude Oil fell to a four week low – down 0.26% – on the back of tepid data from the US and supply levels as stockpiles increased and Libya raised production levels. Gold and Silver both fell after the Fed decision and the strengthened USD – Gold dropped 1.02% and Silver plummeted 2.07%. Natural Gas rose 0.47% as the markets looked at milder weather and supply levels.
After a volatile Asian trading session, we expect more of the same when European markets open as traders there react to the US Fed decision and statement. Also driving markets will be important data releases with the eurozone publishing preliminary consumer inflation data and a separate report on the unemployment rate, a leading indicator of economic health. In North American trading, Canada is to release its monthly GDP report – a strong indicator of economic activity whilst the US is publishing initial jobless claims figures.
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