Markets Boosted by the U.S. Debt Deal Agreement

President Barack Obama announced Sunday night that the U.S. lawmakers have reached an agreement on raising the nation’s debt ceiling and cut spending, which provided some relief, optimism and an instant boost to the equity, commodity and currency markets.

The Asian and European stocks rose today as the U.S. government is trying to finalized the debt agreement which implies raising the government’s borrowing cap to a record and cut spending by more than 2 trillion dollars over the next 10 years. This would avert a possible default and a credit rating downgrade.

Although markets are usually calm in August as investors like to take a break and enjoy their summer vacation, volatility and swift movements are about to persist this week due to the U.S. debt situation, the European debt crisis and the amount of economic data expected in the next few days.

The US.  Will release today the ISM manufacturing report, while U.K., Germany and Europe released the PMI manufacturing report for July which came in worse than expected. Europe also released the unemployment rate for June which matched the previous and the expected 9.9%.

However throughout the reminder of the week we will witness the release of some labor data from the U.S. which precede Friday’s important non-farm payrolls report. While on Thursday the ECB and BoE will issue their monetary policy decisions.

Optimism was also sustained today by China’s PMI manufacturing report for July which came above forecasts, supporting demand for higher yielding assets. This has weakened the low yielding U.S. dollar, Japanese yen and Swiss Frank during today’s morning session.

The USD is trading around the 73.75 level, the JPY is at 77.40, while the CHF is trading at 0.7900. Meanwhile the EUR rose today trading around the 1.4415 level, yet the pound failed to follow the euro’s movement after the disappointing PMI report.

Gold recorded on Friday a new record, and although today it came off its highs, it continues to trade with a positive momentum around $1614.20 per ounce. Oil gained today trading at $97.00 per barrel as growth prospects improved after the U.S. reached a debt deal agreement and could avoid a default.

Sharp Losses for USD After GDP Data

Although demand for safe haven persisted on Friday, the USD was severely punished by the market participants following the disappointing U.S. GDP report. The U.S. economy expanded during the second quarter at the slowest pace since the recession ended, after almost stalling during the first quarter.

The economy grew by an annual 1.3% in Q2, compared with 1.9% growth in Q1, however the first three months’ growth reading was severely revised down to 0.4%. The U.S. also released a disappointing Chicago PMI report that dropped to 58.8 in July from 61.1 previous. While the consumer sentiment also disappointed today falling unexpectedly to 63.7 from the previous 63.8, which is no longer a surprise amid these developments.

Meanwhile the U.S. lawmakers continue to keep the markets edgy due to their failure to reach to an agreement to raise the debt ceiling and cut spending, less than a week before August 2 deadline. A possible default combined with sluggish growth and a possible downgrade for Spain pushed investors towards safe haven.

Stocks in the United States fell sharply at opening on Friday, where the Dow Jones Industrial Average was down by nearly 0.81% to trade around 12140.44, while the S&P 500 index fell by almost 0.81% to trade around 1290.14. European stock indexes were sharply lower before closing on Friday, where FTSE 100 was down by nearly 1.53% trading at 5783.29 and the DAX was lower by nearly 1.54% to trade around 7079.58.

The U.S. dollar fell sharply against a basket of major currencies on Friday, where the U.S. dollar index was trading at 73.85 as of this writing, compared with the highest of the day at 74.50. The Euro rose today affected by the dollar weakness, where the EUR/USD pair is trading at $1.4385, compared with the lowest of the day at $1.4227. The British Pound also rose considerably against the dollar, where the GBP/USD pair trades at $1.6415, compared with the lowest of $1.6259.

Gold rose to a new record high at $1632.42 on Friday as demand for safe haven increased, and as of this writing is trading around $1628.35 an ounce. Crude oil prices fell considerably today on fears the global economic recovery will be affected the U.S. slowdown in growth therefore demand on oil will lessen. Crude oil prices are trading at $95.50 a barrel.

Eyes on the U.S. GDP

Pessimism is dominating the financial markets for another day. U.S. lawmakers did not reach yet to an agreement to raise the debt ceiling and cut spending, which is pressuring the high yielding assets and increases demand on safe Haven.

August 2 is the deadline for such an agreement, otherwise the U.S. will risk to default and have its credit rating downgraded. This could have catastrophic effects on the global financial markets.

Thereby caution, volatility and swift trading will persist until U.S. policy makers will manage to reach a decision. The U.S. GDP today will also be a major focus for investors as the economy may grow in Q2 by 1.8% compared with 1.9% in Q1.

Investors are concerned by the U.S. growth prospects, so today’s report will be of interest for the Forex, commodity and equity markets, yet Washington will continue to be a main generator for sentiment.

Investors have been loosing their confidence since financial distress is seen from both sides of the Atlantic. Spain was also put under review for downgrade by Moody’s which cast more doubt on EU’s ability to contain the credit crisis.

Meanwhile the European economy released today a lower than expected CPI flash estimate for July, raising speculations that the European Central Bank may not need to raise interest rates in September as previously expected.

This outcome managed to increase the euro’s downside pressures. The single currency is trading around the 1.4280 level. The pound is trading in a euro centric mode, with a downside momentum, around the 1.6290 level.

U.K. released today a disappointing M4 money supply for June, yet the economy witnessed an improvement in the net consumer credit and mortgage approvals in June. However the data did not get much attention from the markets.

Although the U.S. economy is expected to grow in Q2 at the slowest pace since the recession ended, risk aversion and pessimism continue to support the USD. The dollar index is trading as of this writing around the 74.30 level.

The U.S. will also release today the consumer’s sentiment for July via University of Michigan index, and the Chicago PMI, which will be of some interest since the manufacturing sector has been rather disappointing lately.

Gold fell from its highs, yet remains near its all time record with the rising uncertainties from both sides of the Atlantic. The precious metal is now treading in a tight range around the $1613.65 level.

Improved U.S. Data Increased Demand on the USD

After fears from the U.S. lawmakers failure to reach to an agreement to raise the debt ceiling and cut spending, less than a week before August 2 deadline, spread throughout the markets this morning, weighing down on the USD; the greenback managed to recover all the losses seen during the Asian session after the U.S. released a better than expected jobless claims report.

Jobless claims fell by 24,000 to 398,000 in the week ended in July 23, to fall below the 400,000 level for the first time since early April. This managed to boost confidence in the economy and divert the attention from the debt ceiling saga for a while. Officials will vote again today on a debt-limit increase proposal, therefore caution will persist since a possible default could have catastrophic effects on the financial markets.

Meanwhile the pending home sales rose unexpectedly during June by 2.4% from -2.0% expected. Volatility and demand on safe haven continues to dominate the global financial markets since uncertainties keep sentiment fragile, while contagion fears from Europe continue to drain the euro.

Stocks in the United Statesrose at opening on Thursday, where the Dow Jones Industrial Average was up by nearly 0.26% to trade around 12334.57, while the S&P 500 index rose by nearly 0.37% to trade around 1309.76. European stock indexes were lower before closing on Thursday, where FTSE 100 was down by nearly 0.34% trading at 5836.61 and the DAX was lower by nearly 1.41% to trade around 7150.57.

The U.S. dollar rose back against a basket of major currencies on Thursday, where the U.S. dollar index was trading at 74.25, compared with the lowest of the day at 73.87. The Euro dropped against the Dollar, where the EUR/USD pair is trading at $1.4300, compared with the highest of the day at $1.4400, and the British Pound is almost unchanged against the dollar, where the GBP/USD pair trades at $1.6322, compared with the opening of $1.6328.

Gold prices were little changed on Thursday, where gold traded around $1612.00 an ounce, and crude oil prices rose, where crude oil prices are trading at $97.60 a barrel.

Volatility Part of the Equation as Uncertainties Mount

The failure of U.S. lawmakers to reach an agreement to raise the debt ceiling, cut spending and reduce the country’s deficit, less than a week before August 2 deadline, continued to weigh down on the USD, since a possible downgrade of the U.S. credit rating could have catastrophic effects on the global financial markets.

Traders now are anxiously waiting for the U.S. lawmakers to reach a deal and for the economy to release tomorrow’s advanced GDP reading for Q2, to determine if the largest economy in the world is about to witness a double dip recession or not, and whether the global economic recovery is about to continue or not.

All these developments are keeping the USD weak, trading as of this writing around the 74.00 level, and opening the way for some currencies with much more stable economies to continue trade at record highs including the NZD, the AUD and the CHF.

Gold fell from its highs, yet remains close to its record values, as uncertainties keep sentiment fragile. As of this writing gold trades around the $1617.90 level. Oil is trading with an upside bias around the $97.70 per barrel level, since the dollar weakness has been giving crude some upside momentum.

Asian and European stocks sank today on fears from a possible default by theU.S.economy, and until lawmakers will resolve this problem, investors might continue to pull their money out of the equity markets and invest in the safe haven gold, yen or CHF.

Although the USD weakened, the Euro was little changed today, since the single currency remains under pressure amid renewed contagion fears and a lackluster unemployment change report from Germany. Europe’s confidence survey for today also presented a weaker than expected outcome.

Today the U.S. will release its pending home sales alongside the weekly jobless claims. However the focus will remain on Washington and on tomorrow’s GDP report, since lackluster growth is seen from both sides of the Atlantic, which will keep volatility as part of the equation this week.

Debt Ceiling Saga Continues to Spread Pessimism in Global Financial Markets

Stock markets extended their drop on Wednesday amid rising concerns that U.S. lawmakers will fail to reach an agreement to raise the debt ceiling and reduce the deficit with less than one week remaining before an August 2, deadline set by the U.S. Treasury Department.

Moreover, the U.S. Commerce Department released the durable goods orders for the month of June, where durable goods fell below expectations to confirm the weakness in economic activities during the second quarter of this year.

Pessimism continued to be the dominant theme in global financial markets, as global equity markets fell on Wednesday, while investors sought low yielding and safe assets against higher yielding ones, which pushed stocks and other higher yielding assets to drop.

Stocks in the United States fell by opening on Wednesday, where the Dow Jones Industrial Average was down by nearly 1.0% to trade around 12,376, while the S&P 500 index was down by nearly 1.50% to trade around 1312. European stock indexes were lower before closing on Wednesday, where FTSE 100 was down by nearly 1.25% to trade at 5854 and the DAX was down by nearly 1.60% to trade around 7232.

The U.S. dollar rose back against a basket of major currencies on Wednesday, where the U.S. dollar index was trading at 73.70, compared with the opening level at 73.51. The Euro dropped against the Dollar, where the EUR/USD pair traded at $1.4426, compared with the opening level at $1.4508, and the British Pound also dropped against the Dollar, where the GBP/USD pair traded around $1.6372, compared with the opening level at $1.6418.

Gold prices rose on Wednesday to a new record high at $1628.38 an ounce, where gold was trading around $1625 an ounce recently, and crude oil prices fell after the EIA report showed crude oil inventories increased above expectations, to trade around $97 a barrel.

High Demand on Safe Haven Yet the U.S. Dollar Continues to be Weak

Although demand on safe haven persisted today, the U.S. dollar continues to be weak, trading around 73.50 since this morning, as traders remain worried that U.S. lawmakers will fail to reach an agreement to raise the debt ceiling and cut spending, which could lead to downgrading the AAA credit rating for the U.S.

A possible default could also slow the global economic recovery, thereby caution and demand for safe haven persisted today. Gold climbed to a new record high today at $1625.46. The CHF also reached a record high at 0.7993. The New Zealand dollar also climbed to a new all-time record high at 0.8764.

The yen continues to trade near a 4 months high at 77.55, while the Australian dollar set a new 28-year high after the Australian CPI showed prices pressures rose at the fastest pace during Q2 since late 2008, boosting speculations that the RBA might raise the interest rates sooner than expected.

The euro is trading around the 1.4500 level since this morning, with a slight downside momentum, since investors are reluctant to enter the market amid the huge uncertainties surrounding the outlook of the global recovery with the U.S.deadlock and Europe’s sovereign debt crisis.

Although the euro had a remarkable performance since the euro area ministers reached to an agreement over Greece’s second bailout package last week, the long term problems are not gone yet, and investors still doubt Europe’s ability to manage its sovereign debt crisis till the end.

The pound is almost unchanged today, and as of this witting is trading around the 1.6410 level, with only the CBI total orders on schedule today, which could have a disappointing outcome. Europe lacks the important economic data today, so markets will continue to focus on the developments from across the Atlantic.

The U.S. will release today its durable goods orders for June and the crude oil inventories, as well as the Fed’s beige book later in the day. The month of August is around the corner, when markets are usually quiet because of summer holidays, yet this year’s developments may keep markets volatile.

U.S. Debt Concerns Remain the Dominant Theme in Markets

Pessimism continued to dominate global markets on Tuesday, amid the failure of U.S. lawmakers to reach an agreement to raise the debt ceiling, where Democrats and Republicans continue to debate over a compromise plan to raise the debt ceiling and reduce the deficit one week before a deadline set by the U.S. Treasury Department, which after the United States will default on its debt payments.

The United States faces the risk of defaulting on its debt payments if a deal is not reached, and such an event is expected to lead to a huge panic wave across global markets, where some even believe it could send the U.S. economy back into recession.

Moreover, data from the United States signaled more weakness, as the S&P/CaseShiller house price index showed home prices fell in 20 metropolitan cities in the United States, while new home sales also fell by 1.0% in June to reach 312,000 units, compared with 319,000 units in the prior estimate. On the other hand, the Conference Board released the consumer confidence index for the month of July, where consumer confidence rose above expectations to 59.5 from a prior revised estimate of 57.6, but negativity remained widely spread across European and U.S. markets.

Stocks in the United States fell by opening on Monday, where the Dow Jones Industrial Average was down by nearly 0.60% to trade around 12,515, while the S&P 500 index was down by nearly 0.40% to trade around 1332. European stock indexes were lower before closing on Monday, where FTSE 100 was down by nearly 0.25% to trade at 5910 and the DAX was down by nearly 0.35% to trade around 7317.

The U.S. dollar fell against a basket of major currencies on Tuesday, where the U.S. dollar index was trading at 73.72, compared with Monday’s closing level at 74.11, as markets opened with a downside gap. The Euro rose against the Dollar, where the EUR/USD pair traded at $1.4469, compared with the opening level at $1.4372, and the British Pound also rose against the Dollar, where the GBP/USD pair traded around $1.6384, compared with the opening level at $1.6279.

Gold prices were slightly lower on Tuesday after rising to a new record high on Monday at $1621.56 an ounce, where gold was trading around $1611 an ounce, and crude oil prices fell to trade around $98 a barrel.

Greenback Under Pressure as the U.S. Debt Deadlock Continues

Despite the uncertainties that surround the global economic recovery, the high yielding assets managed to incline today as the dollar selloff intensified since the Democrats and Republicans failed to reach an agreement to raise the debt ceiling and cut spending.

As August 2 deadline is near, and the U.S.lawmakers remained deadlocked, the USD came under huge selling pressures, which sent the euro, GBP and other high yielding assets to the upside. This also drove the Swiss frank to a new record high against the dollar at 0.7995 and the yen to a 4 months high against the dollar at 77.87.

The European debt situation is not solved yet, however the focus turned to the U.S., since investors question their ability to handle their debt problems, especially after Europe presented the Greek package, which managed to calm some spirits down for a while and bring the euro even more gains.

Although it is hard to believe that the U.S.will put itself in a default scenario, caution will persist until the dark clouds will be gone. However some optimism was seen this morning in Asia on improved earnings reports, which brought gains to the Asian stocks.

The euro rose today to the highest of 1.4522 and as of this writing is trading around the 1.4470 level, despite the numerous questions about the long term dilemma Europe is facing while the German Gfk consumer confidence disappointed today falling to 5.4 in August from 5.7 previous.

The pound rose today to the highest of 1.6412 and as of this writing is trading around the 1.6388 level, although the Advanced GDP report showed today that the economy grew only by 0.2% in Q2 from the previous 0.5%, which could weigh down on any rate hike bets.

Gold is trading today around the $1611.65 level yet close to yesterday’s record high. Crude oil remains consolidated around the $99.50 level. The U.S.will release today a bunch of data including new home sales, the consumer confidence reading and the S&P/CS Composite-20 HPI.

Forex News – Pessimism Prevails as U.S. Lawmakers Fail to Reach an Agreement to Raise the Debt Ceiling

Pessimism continued to dominate global markets on Monday, as U.S. lawmakers failed to reach an agreement to raise the debt ceiling, where Democrats and Republicans continue to debate over a compromise plan to raise the debt ceiling and reduce the deficit before an August 2, deadline set by the U.S. Treasury Department.

The United States faces the risk of defaulting on its debt payments if a deal is not reached, and such an event is expected to lead to a huge panic wave across global markets, where some even believe it could send the U.S. economy back into recession.

Stocks in the United States fell by opening on Monday, where the Dow Jones Industrial Average was down by nearly 0.50% to trade around 12,620, while the S&P 500 index was down by nearly 0.50% to trade around 1338. European stock indexes were mixed before closing on Monday, where FTSE 100 was down by nearly 0.15% to trade at 5927 but the DAX was up by nearly 0.35% to trade around 7351.

The U.S. dollar was little changed against a basket of major currencies on Monday, where the U.S. dollar index was trading at 74.22, compared with the opening level at 74.16. The Euro slightly fell against the Dollar, where the EUR/USD pair traded at $1.4349, compared with the opening level at $1.4366, and the British Pound also dropped against the Dollar, where the GBP/USD pair traded around $1.6280, compared with the opening level at $1.6298.

Gold prices erased earlier gains on Monday after rising to a new record high at $1621.56 an ounce, where gold was trading around the opening level at $1615 an ounce, and crude oil prices were also little changed to trade around $99 a barrel.

Gold and CHF at Record Highs as Demand for Safe Heaven Intensifies

It was difficult for the global financial markets to maintain the optimism triggered byGreece’s bailout deal announced last week as traders are more concerned by the political disagreement among theU.S.lawmakers over raising the country’s debt ceiling and cut spending.

Democrats and Republicans are struggling to reach a compromise deal since they continue to be deadlocked only one week before August 2 deadline. This turned optimism into pessimism today, as fears from a possible default spread among the markets participants and demand for safe heaven increased.

Adding to today’s worried was Moody’s decision to cut Greece’s credit rating to Ca from Caa1, saying that investing in the debt-laden European nations continues to be very risky and implies “ substantial economic losses”. The euro fell today to the lowest of 1.4327 and is trading around 1.4370 as of this writing.

As uncertainties mount and lack of confidence remains a key factor in the global financial markets, selloffs spread across the board. This drove the pound to the lowest of 1.6259 althoughU.K.released today a better than expected BBA for house purchases report.

Gold continued today to record a new historical high at $16230.00 and as of this writing is hovering around the $1620.00 level. However the worries from a possible slowdown in the global recovery, pushed oil prices slightly lower today, and as of this writing is trading around the $99.30 level.

Economic data from theU.S.will be absent today. However investors will continue to focus on the States awaiting an agreement about the debt ceiling issues. The dollar however continue to strengthen trading around 74.15 as demand on lower yielding assets remains high.

The safe heaven yen also strengthened today trading around 78.15 as of this writing, while the Swiss frank reached a record high against the USD at 0.8038. The Asian and European stocks also fell today from fears the world’s largest economy may default.

Forex News – Pessimism Resurface on Doubts of EU Bailout Deal, and U.S. Debt Ceiling Negotiations

Pessimism resurfaced in markets on Friday, as investors doubted whether a European bailout for Greece will be enough, and if it will prevent the debt crisis from spreading across the Euro Zone region, meanwhile, U.S. lawmakers continue to negotiate a deal to raise the debt ceiling and reduce the swelling deficit, with news suggesting that a compromise deal could soon be reached, although nothing is confirmed yet.

Markets opened in Asia earlier on Friday with strong optimism, nonetheless, as European and U.S. markets opened, pessimism soon dominated trading, which increased demand for lower yielding assets and safe assets.

Stocks in the United States fell by opening on Friday, where the Dow Jones Industrial Average was down by nearly 0.55% to trade around 12,655, while the S&P 500 index was down by nearly 0.40% to trade around 1338. European stock indexes were mixed before closing on Friday, where FTSE 100 was up by nearly 0.20% to trade at 5911 but the DAX was down by nearly 0.20% to trade around 7277.

The U.S. dollar inclined against a basket of major currencies on Friday, where the U.S. dollar index was trading at 74.32, compared with the opening level at 74.11. The Euro fell against the Dollar, where the EUR/USD pair traded at $1.4343, compared with the opening level at $1.4408, and the British Pound also dropped against the Dollar, where the GBP/USD pair traded around $1.6281, compared with the opening level at $1.6321.

Gold prices were higher on Friday trading near the record high recorded earlier in the week, where gold was trading around the opening level at $1604 an ounce, and crude oil prices fell to trade around $98 a barrel.

Risk Appetite Reemerges on Greece’s New Rescue Deal Yet Gains Seen Limited

After E.U. leaders agreed onGreece’s new bailout plan which eased concerns over the outlook of the European debt crisis, confidence was boosted and risk appetite spread within the global markets increasing demand for higher yielding assets.

The euro-area officials announced yesterday reaching a deal on Greece’s second bailout plan worth 159 billion euros which also includes replacing existing bonds with new bonds at a lower interest rate and longer maturities.

The deal also included other debt-laden nations including Ireland and Portugal. This helped the Asian and European equities to turn green, while the euro rallied this morning to a two-week high against the dollar.

The quarterly earnings from the States continue to be positive, which is giving an additional support to confidence across the broad markets. Thereby demand on the safe heaven gold fell today and yesterday and is trading around the $1588.00 level as of this writing.

Crude oil touched today the highest of $99.81 per barrel level as contagion fears across the European countries such asIreland,Portugal,ItalyandSpainfell considerably, and now oil is consolidating around the $99.40 level.

Yesterday’s news eased concerns over the outlook of the European debt crisis, however theU.S.lawmakers continue to negotiate a deal to raise the debt ceiling and reduce the deficit, which is keeping markets cautious.

If the Democrats and Republican will agree on a deal then traders will target higher yielding assets since risk appetite will increase. However investors must eye for now any statement coming from the major rating agencies since they could have other sayings aboutEurope’s debt crisis.

Today Europe released a positive industrial new orders report, yetGermanydisappointed with a lackluster Ifo business climate report. This managed to limit the euro’s gains, especially since the single currency found a resistance at 1.4420 which pushed it down to the 1.4400 level.

The pound lacked the fundamentals today, yet the currency fell slightly since it continues to move in a euro centric mode. The yen weakened and as of this writing is trading around the 78.50 level as demand fro safe heaven weakened.

TheU.S.will lack the economic data today, yet traders will turn their focus toCanadasince the economy will release the CPI report for June as well as the retail sales report for May, both expected to weaken.

The dollar index is trading around the 74.00 level, slightly better than yesterday when it was severely punished by the news coming from Europe. Markets may continue to be swift and volatile ahead of the weekend, awaiting an agreement from the U.S. lawmakers.

Forex News – Optimism Spread Through European and U.S. Financial Markets

Optimism spread through European and U.S. financial markets on Thursday after strong earnings boosted confidence in stock markets, while a draft released by Reuters signaled EU leaders will undertake an expanded measure to help debt-laden nations in the Euro Zone including Greece, Portugal, and Ireland, and economic data from the United States came in better than expectations, which further supported confidence among traders.

A number of U.S. corporations announced their financial results for the second fiscal quarter of this year, where most companies continued to report better than expected earnings, where the earnings season so far is proving to be a strong one, since most companies were able to withstand the economic slowdown during the second quarter of this year.

The jobless claims rose last week to 418,000 according to a report from the U.S. Labor Department, above expectations of 410,000. While the leading indicators index rose in June by 0.3%, above expectations of 0.2% and down from 0.8% in the prior month, and the Philadelphia Fed index rose to 3.2 in July, also above expectations of 2.0 and rising from -7.7 reported back in June.

Stocks in the United States rose by opening on Thursday, where the Dow Jones Industrial Average was up by nearly 1.20% to trade around 12,725, while the S&P 500 index was up by nearly 1.35% to trade around 1343. European stock indexes were also higher before closing on Thursday, where FTSE 100 was up by nearly 1.10% to trade at 5918 and the DAX was higher by nearly 1.35% to trade around 7318.

The U.S. dollar declined against a basket of major currencies on Thursday, where the U.S. dollar index was trading at 74.29, compared with the opening level at 74.69. The Euro rose sharply against the Dollar, where the EUR/USD pair traded at $1.4380, compared with the opening level at $1.4259, and the British Pound also gained strongly against the Dollar, where the GBP/USD pair traded around $1.6283, compared with the opening level at $1.6165.

Gold prices were little changed on Thursday, where gold was trading around the opening level at $1598 an ounce, and crude oil prices also rose to trade just below $100 a barrel.

Eyes on the E.U. Summit

Broad markets are doing their best to hold to yesterday’s gains, yet this task seams difficult ahead of an emergency summit for E.U. leaders and data fromChinasignaling that the manufacturing sector contracted further in July.

Markets hope that the E.U. leaders will be able to make progress in resolving the Greek debt crisis. Meanwhile news emerged thatFranceandGermanyreached an agreement overGreece’s debt crisis, spreading some optimism earlier today.

As investors will remain focused on the European debt crisis and worry from a possible contagion, especially toItalyandSpain, caution will persist, and the Forex market will continue to be swift the next two days.

Chinasaw contraction in July’s factory orders, indicating thatChina’s tightening measures to cool inflation may have started to put pressures on growth. This spread fears among the Asian investors, and demand for the safe heaven yen increased.

Adding to the downside pressures on sentiment was today’s disappointing PMI reports fromGermanyandFrance, and a worst than expected current account report fromEurope. The euro is trading with a downside bias around 1.4180.

The pound fell today although the retail sales witnessed a slight improvement in June, yet the public sector net borrowing was disappointing, while the storm in the nearby European continent is weighing on overall sentiment.

As the level of uncertainty remains unusually high, markets will be trading within limited ranges. Gold managed to climb back above the $1600.00 per ounce level as demand on safe heaven continues.

Meanwhile oil fell below the $97.50 level as the global economic outlook remains unclear. The U.S. will release later in the day the weekly jobless claims and the Philly manufacturing index, yet the attention will continue to be on politicians who are trying to reach a deal to raise the debt ceiling.

Forex News – Strong Earnings and News of Debt Compromise Deal Overshadow Worse than Expected Existing Home Sales

Mixed feelings dominated financial markets on Wednesday, where investors were hopeful that U.S. lawmakers will reach a compromise deal to raise the debt ceiling before an August 2, deadline set by the Treasury Department, in addition to more bright financial results from U.S. companies, as the earnings season is proving to be a strong one so far, while worse than expected data from the United States put negative pressure on confidence, where existing home sales fell below expectations in June.

The existing home sales index was released for the month of June, where sales of previously owned homes fell 0.8% to an annual rate of 4.77 million units, compared with the prior estimate of 4.81 million units, and below median estimates of 4.90 million units.

Stocks in theUnited Stateswere mixed by opening on Wednesday, where the Dow Jones Industrial Average was down by nearly 0.10% to trade around 12,576, while the S&P 500 index was up by nearly 0.06% to trade around 1328. European stock indexes were also mixed before closing on Wednesday amid optimism ahead of a meeting between Angela Merkel and Nicolas Sarkouzi, where FTSE 100 was up by nearly 0.60% to trade at 5826 and the DAX was lower by nearly 0.10% to trade around 7185.

The U.S. dollar declined against a basket of major currencies on Wednesday, where the U.S. dollar index was trading at 74.94, compared with the opening level at 75.16. The Euro rose against the Dollar, where the EUR/USD pair traded at $1.4197, compared with the opening level at $1.4170, and the British Pound was little changed against the Dollar, where the GBP/USD pair traded around the opening level at $1.6126.

Gold prices were little changed on Wednesday after falling on Tuesday from a new record high at $1609.92 an ounce, where gold was trading around $1590 an ounce, and crude oil prices slightly rose to trade around $98 a barrel after the EIA report showed that crude oil inventories fell last week below expectations.

Forex News – Markets Rally on Improved Outlook

After Apple reported better than expected profits and the U.S. lawmakers are approaching an agreement regarding the country’s debt ceiling, confidence was boosted and risk appetite within the global financial markets increased demand for higher yielding assets, dragging the Asian and European stocks in green.

Since Apple’s quarterly profits more than doubled, the outlook for the U.S. economic performance could become more positive. Optimism however was also supported by news that the U.S. congress is close to reaching a deal to raise the debt ceiling before August 2, deadline, and reduce the deficit.

Yet the positive momentum financial markets enjoyed in the past couple of days may be short lived, since Europe’s credit woes remain a core issue. Investors will continue to be vigilant since EU leaders will start a summit tomorrow during which they will continue to negotiate over a resolution to EU’s debt crisis.

Yesterday’s better than expected housing data in addition to better than expected earnings from major U.S. companies extended the dollar’s drop, since rising risk appetite is weighing down on the safe heaven greenback against other majors. The dollar index is trading below the 75.00 level as of this writing.

The euro extended its gains ahead of tomorrow’s summit, since investors hope officials might find a solution to ease Greece’s debt problems. But since contagion risks still persist and Italy and Spain are still in danger, the euro is seeing limited gains. The single currency is hovering now around today’s highest at 1.4200.

The pound was weak this morning ahead of BoE’s meeting minutes, which showed a split among the MPC members. Yet the majority of the panel members remained dovish, and interest rates most probably will be kept low for an extended period of time although inflation is expected to rise further, above 5%.

This stance was widely expected by the markets, therefore, the GBP barely moved with the news, and as of this writing continues to move in a euro centric mode, with an upside momentum, around the 1.6130 level. The AUD was also able to gain today and is trading around the 1.0740 level as of this writing.

Gold retreated from yesterday’s record highs, trading around $1586.00 level, as demand for safe heaven softened; yet since the outlook for the U.S. economy improved, crude oil managed today to extend yesterday’s gains and as of this writing is trading at $98.80 per barrel level.

Europe was relatively quiet with data today, with only the German PPI on schedule, which slightly exceeded expectations. However the U.S. will release later the existing home sales numbers along with the crude oil inventories numbers, both expected to improve

FXCM Monthly Report, June 2011

FXCM Inc. announced, last week, certain key operating metrics for June 2011. The report included details regarding its Forex and retail operations.

June 2011

Retail Trading Metrics:

FXCM reported that had a retail customer trading volume of $317 billion in June 2011 which is 3% lower than in May 2011, and 10% higher than June 2010. Its retail customer trading volume for the Q2 2011 was $938 billion. That is the highest in FXCM history and is 14% higher than it was in Q1 2011. Further, FXCM reported that volume from referring brokers and white labels was 57% of total retail trading volume in the Q2 2011.

It also reported that its average retail customer trading volume per day was $14.4 billion in June 2011; making it 3% lower than in May 2011 and 10% higher than June 2010. An average of 363,557 retail client trades per day in June 2011 was reported; meaning there was no significant change from May 2011 and 13% higher than June 2010. The 171,138 tradeable accounts as of June 2011, marks an increase of 3,294, or 2%, from May 2011, and an increase of 5,851, or 4%, from June 2010.

Institutional Trading Metrics

The institutional customer trading volume of $72 billion in June 2011 is 10% lower than it was in May 2011 and is 8% higher than it was in June 2010. Institutional volume for the Q2 2011 was $214 billion, the second highest in FXCM history and 2% lower than the record Q1 2011. The average daily institutional trading volume of $3.3 billion in June 2011 is 10% lower than it was in May 2011 yet it is 8% higher than it was in June 2010.
FXCM also reported an average of 7,263 institutional client trades per day in June 2011; 16% lower than the number of institutional client trades per day it reported in May 2011 but a remarkable 100% higher than June 2010.

Drew Niv, President and CEO of FXCM said, “I am pleased to see our strategy producing solid results in our operating metrics.”  He continued, “We believe we are well positioned to continue to capitalize on growing interest in foreign exchange and FXCM’s agency model, which we believe differentiates us from our competition.”

ForexTrading.com (Saxo Bank) Adds Indices and Commodities CFDs to Instruments Already Offered

Saxo Bank announced today that it will now offer 12 CFDs on major stock indices and 7 commodity CFDs to ForexTrading.com’s platform for their private traders. Head of Markets at Saxo Bank, Claus Nielsen, said: “The addition of stock index CFDs and seven further commodity CFDs to ForexTrading.com now enables private investors to trade in the most liquid contracts across a range of asset classes. The majority of clients use ForexTrading.com as a no thrills account to trade currencies, however we want to make sure that they have the opportunity to leverage the opportunities they see in other asset classes.”

Alpari US Announced its Partnership with Dukascopy Bank

Alpari announced today that it is partnering with Dukascopy Bank SA. In light of recent regulatory changes in theUnited Statesvis-à-vis Forex exchanges the companies have agreed to an arrangement which allows Alpari to offer Dukascopy’s trading environment and technology to US based clients.

Alpari will utilize Dukascopy’s technological environment and will provide foreign exchange services by way of a white label of Dukascopy’s platform, JForex. The platform will operate in compliance with within the regulations established by the FCM and RDED; it will provide access to over 35 pairs and will be available as a demo as well.