Daily Analysis: European Stocks Tumble on Lack of Risk Appetite

Forexminute Representative


The dollar is much weaker this morning after climbing in recent trading days. The AUD/USD forex binary option is higher by 0.12 percent at $1.0418. The USD/CHF has fallen 0.17 percent to the 0.9442 Swiss francs level. The GBP/USD pair has gained 0.15 percent to $1.6007. The demand for the dollar is lower this morning following a stock market slump yesterday and a looming fiscal cliff.


The European single currency has lost a lot of ground today, as traders grow wary over the woes that have hit the European economy. For example, there is expected to be additional negative economic data in the coming hours of trading. This has really led to a lot of risk aversion in the markets. As a result, traders have sold currencies such as the euro for safer assets. The EUR/USD pair is lower by 0.14 percent at $1.2754.


There is less demand for safe-haven currencies such as the yen and the dollar today. The USD/JPY pair is up 0.11 percent at the 79.56 yen level. Traders have decided to buy into riskier assets today, as Japan recently published positive economic data. In addition, a trend we have seen a lot of lately is traders taking much more risks during end-of-week trading.


European stocks slumped for yet another trading day on Thursday. This was largely due to a selloff in auto manufactures, despite the positive figures of a number of leading companies.

The Stoxx Europe 600 Index slid 0.2 percent to 270.58. Germany's DAX Index lost 0.4 percent. France's CAC fell 0.1 percent. The U.K. FTSE 100 retreated 0.3 percent.

Hermes added 2 percent to 223.60 euros. Siemens AG climbed 1.8 percent to 80.27 euros. Cable & Wireless rallied 5.8 percent to 38 pence.

Crude Oil

Crude oil climbed on Thursday, as prices rose by 0.8 percent, which is after sliding several percent the day before. Crude oil futures are higher this morning by 0.2 percent at $85.26. Oil prices are stronger as of now on the weaker dollar. The fact of the matter is that oil prices have been very weak lately. Therefore, the upturn we are seeing at the moment isn’t surprising. The current gains for the commodity may be extended later on this Friday.


Gold has soared in recent trading days, and especially on Thursday. This is due to fears over the U.S. fiscal cliff. The result has been traders buying into gold, as they view it as one of the safest assets to invest their money. The gains for gold also come on the weaker dollar. Prices are much higher this Friday by $7.95 at $1,733.95. Further gains may be on the cards later on today.