Forex News – Confidence in the Global Recovery Drives Stock Markets Higher

By ForexMansion.com

Markets disregarded today all the risky events that continue to take place across international financial markets. Although confidence dropped yesterday in the US, while S&P downgraded Portugal and Greece's debt rating once again, investors are confident the global recovery is strong enough to counter various impediments.

Markets participants are confident that the global economy will counter Japan's nuclear crisis and the effects of the huge earthquake that devastated the country on March 11, especially as factories announced they will soon resume production in Japan. Those speculations pressured the yen lower and the Asian stocks higher today.

The yen hovers around the 83.00 level, although there were no announcements of any intervention by the BoJ. The pound rose today after Britain's services companies grew the most since 2002, surpassing the 1.60 level. The euro hovers in a tight range around 1.41 levels.

Despite rising sovereign debt issued in Europe, the euro remains at its stronger part of its range against the dollar, since it found support from talks of an interest rate hike next week. But with many dark clouds lurking over Europe's sky, investors should monitor the currency markets closely.

Investors will eye tomorrow the third round of Irish stress tests, since whispers emerged that results will show the Irish government may have to take control of the country's biggest banks. But today investors await the US ADP report which paves the way for Friday's non-farm payrolls report.

As recovery in the US economy seems solid, gold continues to loose some of its bakers, moving within a very tight range around the 1410.00 level, waiting for more confirmation. But if the military conflict in Libya may intensify and Europe's debt crisis may widen, we could see demand for this safe heaven increasing.

Oil prices are steady today with a downside bias, as markets expect a rise in today's crude oil inventories that the US will release later in the day. Prices hover around the 104.50 dollar per barrel level. But with the continued Libyan fighting, prices remain vulnerable to any developments in the region.

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Originally posted here