During the early trading session, Asian stocks traded lower as concerns over China’s economy weighed on market sentiment. Chinas Central Bank announced that the required bank reserves will be lowered to 18.5% from 19.5%, hence, adding more currency into circulation. This move came following data showing that China’s economy grew 7% in the past year, the slowest increase since 2008. The Nikkei share average was down 0.09%, closing at 19,634 points. Following the release of negative data from New Zealand, the AUD/USD traded higher. The yearly and quarterly Consumer Price Index figures both showed lower than expected figures.
During the European session, the EUR/USD moved lower and is currently trading above 1.072 following weak European data. The monthly and yearly German Producer Price Index figures came out lower than expected. Furthermore, Concerns over Greece continue as the nation is yet to reach an agreement with its creditors. Greece could go into default and exit the European Union if a list of economic reforms have not been laid out in order to extend its existing bailout accord.
The open of the U.S. trading session is moving with little volatility as few economic reports are to be released today. We may see more movement later today as BoC Governor Stephen Poloz is to speak. As head of the Bank of Canada’s board, traders will listen closely to his remarks for any hints on future monetary policy.
Gold is currently trading at a weekly low as traders sell the usually safe haven asset as they remain cautious over the economic situation in China. China is the second biggest buyer of the yellow metal and news of easing measure introduced by the Central bank spurred demand.
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