Building expectations that the European Central Bank will buy debt from distressed countries like Spain and Greece sparked a risk-on trading session.
Similar expectations that the Federal Reserve will stimulate the U.S. economy via buying Treasury bonds and mortgage-backed securities from banks sparked a risk-on trading session as well, which normally sends gold gaining.
At the close of European trade, the EURO STOXX 50 gained 1.71%, France’s CAC 40 soared 1.52%, while Germany’s DAX 30 added 0.71%.
At the close of U.S trade, the Dow Jones Industrial Average was up 0.39%, the S&P 500 index climbed 0.51% while the Nasdaq Composite index gained 0.87%.
Overnight, ratings agency Standard and Poor’s revised the outlook for Greece to negative, from stable, and warned that Athens was likely to miss the financial targets set by its international lenders, which would increase the likelihood of a default.
Germany will release its official data on industrial production at 10:00GMT, this data will came just after yesterday German factory orders tumbled 1.7% in June, almost twice as much as expectations for a 1.0% decline.
Mid importance data is also expected out of the US today including the EIA Crude Oil Stocks change, MBA Mortgage application, Non-farm productivity and 10 year note auction.
EUR/USD The euro edged lower against the U.S. dollar on Wednesday, but remained supported close to a one-month high by expectations for action by the European Central Bank to ease the debt crisis in the euro zone. The pair was likely to find near-term support at 1.2341, Monday’s low and resistance at 1.2442, Monday’s high and a one-month high.