Market News

Speaking from Canada on Thursday after a brief summer vacation, German Chancellor Angela Merkel reconfirmed her intention to work towards the preservation of the euro no matter what the cost.

The US dollar hit a one-month high against the Japanese yen during Thursday’s Asian session, rising to 79.15, as investors anticipate the slowing of the Fed’s economic stimulus plans, a forecast which comes in advance of Thursday’s US building and housing report.

According to statistics published on Tuesday, economic activity in the European Union declined at an annualized rate of 0.7 percent in the second quarter of this year, following a similarly brutal first quarter.

The close of Wall Street on Monday saw stocks edging slightly lower, ending a six-day run that had been most welcome in this volatile summer.

Reports out of Asia this morning indicated that Japan’s economy grew 0.3 percent in the second quarter of 2012, a number which, although positive, fell quite short of the 0.6 percent that analysts had expected.

The Euro continues to drop as the Dollar and Yen keep rising against it. Many traders are recommending that the Euro should not be bought any time soon.

Markets on Wednesday barely managed to hold onto their rally for the fourth day, but the euro fell 0.3 percent to $1.2359, following its one-month high on Monday of $1.2443.

Concerns about the European debt crisis have instigated contagion fears in the minds of investors worldwide, but recent market movements have shown that investors are now hopeful that the tides are changing and that the European Central Bank may soon take action to contain the debt crisis.

Last week Wall Street saw sudden and unexpected volatility as the result of a glitch in the computer of market-maker Knight Capital.

In Asian trading on Monday the euro gained against the US dollar, rising 0.4 percent to $1.2438, the highest in a month, with investors showing renewed optimism after a non-farm payroll report that was surprisingly positive.

On the heels of a disappointing announcement from ECB President Mario Draghi on Thursday, US stocks continued their downward spiral as investors faced dashed hopes that the European Central Bank would take swift action to resolve the region’s debt crisis.

US consumer spending is down, manufacturing has slowed and a disappointing NFP report is expected this week, but the Federal Reserve and its Chairman, Ben S. Bernanke showed restraint in its announcement on Wednesday, fueling consumer concerns and sending Wall Street steeply downward.

As the world awaits the ECB's announcement on Thursday, many are preparing for the worst and expecting the European Central Bank to disappoint.

Last week the US stock market saw its biggest two-day gain of 2012, but Monday’s trading saw a significant decline as investors wait anxiously for announcements expected from central banks later this week.

Despite predictions from some major financial analysts and news sources that the Euro is headed for a certain demise, Asian stocks have continued to rise, indicating strong consumer hopes to the contrary.