It was a global sell off and no one was spared. The S&P downgraded Greece’s rating to Junk and lowered Portugal’s rating to A-. The Stoxx Europe 50 tumbled 3.33% and the FTSE 100 fell 2.61%. In the U.S, equity markets did not fare much better as the DJIA fell below 11,000, dropping 213 points to close at 10,991.99. The tech heavy NASDAQ fell 2.04%. In overnight trading the Nikkei 225 reacting to the news giving up 287.87 points.
Gold actually advanced on the day in spite of Dollar strength, picking up $8.20 to close at 1,161.70. Investors rushed into safe holdings of which Gold has historically been viewed during economic turbulent times. Oil traded as low as 81.70 yesterday but finally closed at 82.44, giving up a $1.76 a barrel.
The Greenback surged as the flight to quality was in full force across every major market. The DXY, opened at 81.75 and closed near its high at 82.15. The EUR fell to new recent lows versus the Greenback after losing 1.46%. The EUR finished the U.S session at 1.3176. Commodity currencies sold off as well with the NZD giving up the most ground after losing 1.65%.
There was not much on the economic data release docket that would have made much of a difference yesterday as panic sparked a major market sell off. Looking ahead to today we have German CPI as well as Australian CPI data set to be released. Although no change is expected, the FOMC will announce its rate decision today. Any allusion to a possible near term rate hike may send the Greenback soaring once again. Later in the day, the Reserve Bank of New Zealand will announce its rate decision although no change from the current 2.5% is expected.
- Alex Perlmuter
Risk Warning: Please note that Binary Options Trading involves substantial risk of loss.