USD Bullish In Asian Trading

Asian stocks were trading lower after last week’s rather volatile high volume trading and of course the news that the USD85 billion a month bond buying programme could be ended by the Fed as soon as this September. The USD rose as it continues to keep its place as the safe haven asset.

Goldman Sachs was another reason stocks were trading down as it gave its expectations for China’s GDP growth at 7.4 per cent from the previous figure 7.8 per cent, noting weak economic indicators and a firmer control in monetary policy. This comes after the weak HSBC preliminary manufacturing PMI data, which fell to 48.3 last month from 49.2 in May. China saw a decline in new orders, which indicates a manufacturing slow-down.

Stocks
The Goldman Sachs estimate helped push Chinese stocks down; the Shanghai Composite fell 4.60 per cent, the Hang Seng lost 2.18 per cent and the Australian ASX 200 fell 1.47 percent, mostly as China is Australia’s biggest trading partner. The Nikkei 225 in Japan dropped 1.47 percent despite the JPY against the USD close to its lowest level in 2 years.

Forex
Last week, the USD was having a delightful time of gains in the Asian session, with 3.7 per cent close against the Aussie, and a 1.85 per cent rise against the GBP with 1.7 per cent rise against the euro. Further gains were then seen in the Asian session, as the dollar added 0.15 per cent against the EUR, 0.325 against the GBP, 0.66 per cent against the JPY, 0.49 per cent against the Aussie and 0.55 per cent against the Canadian dollar.

Commodities
In spite of early gains at the beginning of the Asian session, the reinforced USD meant further losses for the commodities which also took a beating last week. The Price of Gold was down 0.97 per cent, Silver plummeted 2.11 per cent and Crude Oil was 0.56 per cent lower to touch a 3 week low. Natural Gas continued declining following last week’s 3 day rally, dropping a further 0.09 per cent.

What to watch today:
All eyes on Germany, while European indices futures suggest a lower opening. A fairly uneventful day in terms of economic events and indicators although you can expect a further sell-off in EQ’s which should create volatility, and the chance for binary options traders to profit on these movements.