The impact of weak Chinese economic data on Forex Market – Gold falls down while Oil rises

The Chinese weak economic data heavily influenced the International Forex Market. The Crude Oil turned upward after hitting a one-week low while Gold slumped down for a session in the Forex market.

David Meger, who is the director of metals trading at Future Broker Vision Financial Markets said, “Gold does not seem to garner the same safe-haven demand that we did several weeks back, when we’d have seen concerning news out of Europe have stabilizing effects on gold.” The slowing Chinese growths, a caution on France’s Credit Rating and dimming projection for a solution to the Euro Zone Debt Crises, are the core issues that made the investors worried as the gold fell.

On the other hand, the Brent Oil turned upward slot after hitting a one-week low. The Investors made the large spread positions and outpaced gain by keeping their position unwinding until the higher level of the spread from the major oil benchmark. The Senior Market Strategist in MF Global, Chicago, Richard Ilczyszyn, said that several big market players, who are the experts of online investment, had put up the large spread positions and it could be the unwind of those spreads.

Euro also fell down after hitting the high level and faded debt hopes which made the core economy disturbed. The fall down of Euro once again reduced the hope of wide-ranging solution to the Euro Zone Debt Crises. Euro hit the low of $1.3657 for Tuesday, a fall in German investor sentiment after nearly three years. Geoff Kendrick, a currency strategist at Nomura in London, said, “We continue to head lower with expectations reduced for this weekend’s EU summit, but the outcome of the November G20 summit is still key. If there’s no action taken on plans for bank recapitalization at the G20 then the euro will be sub $1.30 very quickly,”

The tensions over the situation of the European Economy kept the pressure over Euro currency. It may slap an unhelpful viewpoint on French Triple-A credit rating in the upcoming three months. After receding from one-month high of $1.0372, Australian Dollar slipped down to $1.0150.

Posted by Muhammad Sheraz on Oct 19 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry