Forex News – Pessimism Resurface on Doubts of EU Bailout Deal, and U.S. Debt Ceiling Negotiations

Pessimism resurfaced in markets on Friday, as investors doubted whether a European bailout for Greece will be enough, and if it will prevent the debt crisis from spreading across the Euro Zone region, meanwhile, U.S. lawmakers continue to negotiate a deal to raise the debt ceiling and reduce the swelling deficit, with news suggesting that a compromise deal could soon be reached, although nothing is confirmed yet.

Markets opened in Asia earlier on Friday with strong optimism, nonetheless, as European and U.S. markets opened, pessimism soon dominated trading, which increased demand for lower yielding assets and safe assets.

Stocks in the United States fell by opening on Friday, where the Dow Jones Industrial Average was down by nearly 0.55% to trade around 12,655, while the S&P 500 index was down by nearly 0.40% to trade around 1338. European stock indexes were mixed before closing on Friday, where FTSE 100 was up by nearly 0.20% to trade at 5911 but the DAX was down by nearly 0.20% to trade around 7277.

The U.S. dollar inclined against a basket of major currencies on Friday, where the U.S. dollar index was trading at 74.32, compared with the opening level at 74.11. The Euro fell against the Dollar, where the EUR/USD pair traded at $1.4343, compared with the opening level at $1.4408, and the British Pound also dropped against the Dollar, where the GBP/USD pair traded around $1.6281, compared with the opening level at $1.6321.

Gold prices were higher on Friday trading near the record high recorded earlier in the week, where gold was trading around the opening level at $1604 an ounce, and crude oil prices fell to trade around $98 a barrel.