Forex News – Debt Problems in United States and Europe Spread Pessimism...

Pessimism dominated global financial markets on Monday, where traders were concerned over debt problems in the United States and Europe, where traders are speculating EU leaders will fail to reach a resolution to the EU debt crisis in a summit this week, while U.S. lawmakers continue to negotiate raising the debt ceiling in the United States before an August 2, deadline.

Meanwhile, European markets were under immense pressure after analysts signaled that the European stress tests results that were released last week don’t address the exposure of European banks to the Euro Zone’s debt crisis, which spread further pessimism in markets.

The rising wave of pessimism in markets led investors to target low yielding and safe assets against higher yielding ones, where investors targeted lower yielding currencies and gold, noting that gold prices rose to a record high earlier on Monday above $1600 an ounce.

Stocks in the United States fell by opening on Monday, where the Dow Jones Industrial Average was down by nearly 0.65% to trade around 12,400, while the S&P 500 index was down by nearly 0.50% to trade around 1309. European stock indexes were also lower before closing on Monday, where FTSE 100 was down by nearly 1.50% to trade at 5778 and the DAX was lower by nearly 1.05% to trade around 7144.

The U.S. dollar inclined against a basket of major currencies on Monday, where the U.S. dollar index was trading at 75.46, compared with Friday’s closing at 75.13. The Euro fell against the Dollar, where the EUR/USD pair traded at $1.4049, compared with the opening level at $1.4126, and the British Pound also fell against the Dollar, where the GBP/USD pair traded at $1.6061, down from the opening level at $1.6118.

Gold prices rose on Monday to a new record high at $1603.19 an ounce, as investors targeted safe assets, which boosted demand for gold, but crude oil prices fell to trade around $95 a barrel.

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