Investors Seek USD Safety As European-Debt Concerns Worsen

The USD was stronger against all other majors today as more worries over the debt crisis in Europe trigger a push to investors to move to the safety of the dollar. Yesterdays’ data revealed the euro zone GDP shrinking by 0.6per cent against an expected contraction of 0.4%. It is the third quarter in a row of shrinkage and fastest drop that has been seen since 2009.

This morning in European trading, the USD moved higher against the EUR, with the EUR/USD pair falling 0.22% to 1.3333. The German figures for exports and investment also shrunk by 0.6%, against expectations of a 0.5% drop. Meanwhile the euro-zone trade surplus increased to 12 Billion EURO’s in Dec. from 11 Billion the previous month.

The USD was marginally higher against the GBP with the pair dropping to 1.5477 a change of 0.08%.

In the UK retail sales dropped unexpectedly by 0.6% over Jan following a previous drop of 0.3% in December. Expectations had been that it would rise by 0.4%.

The USD shrunk against the JPY with the pair losing 0.44 % to be traded at 92.46 but held firm against the Swiss with the pair inching up 0.06% to 0.9217.

The Yen held firm after the BoJ’s decision to maintain its monetary policy and interest rate. The USD was also higher against its Canadian, Aussie and New Zealand counterparts with 0.14%, 0.10% and 0.15% added respectively.

The USDX which follows the USD against six other major currencies was up 0.06% to 80.52.

Later today US to publish figures on manufacturing in New York and Industrial Production and data to be released by Michigan University of inflation and consumer sentiment expectations.

Stocks
Stocks in the Euro zone showed mixed readings this morning during European trading amid worsening concerns for the European debt crisis. The EURO STTOXX 50 inched downwards by 0.14%, French CAC 40 edged up by 0.07% and the German DAX 30 slid down by 0.16%.

Most of the Asian stocks were trading lower this morning during Asian trading after some weak earnings figures. Also investors are seeking some negative effects after japan allowed its currency to depreciate so dramatically. Nikkei 225 Index dropped by 1.72% and Hong Kong’s Hang Seng saw a 0.07% fall. While Shanghai Composite Index is still closed for the Chinese New Year.

Australian S&P/ASX 200 gained 0.1% which then saw a rally after the Mining firm Rio Tinto dropped its share price by 2% after its earnings figures were released.

Commodities
Oil prices dropped slightly today even with OPEC’s statement that they would cut supply of the commodity. This followed Thursdays rise in prices brought on by Iran and the UN’s failure to find agreement about a date for the inspecting of Irans’ nuclear facilities. Crude Oil futures in New York Exchange dropped by 0.2% to $97.30 a barrel in this morning’s Asian session finding its support at $97.24. Gold Futures on the Comex division for April dropped by 0.24% to $1,631.65 per troy Ounce in Asian trading on the back of weak economic data.

Economic Data
UK retail sales fell by -0.6%. Euro-zone trade balance gained to 12.0B from 11.0B. Italian trade balance dropped last month greater than expected to 2.16B form an expected 2.22B and Japans Industrial Production rose but less than expected.