How to Trade Slower China Growth
Last week, the biggest risk for the currency market was the European Central Bank's monetary policy announcement and the U.S. nonfarm payrolls report. These events triggered big moves in currencies and equities, and particularly so for the euro, which sank to a two-year low against the U.S. dollar. The euro-U.S. dollar currency pair has been under pressure since the beginning of the year, but what drove this latest move was the combination of an interest-rate cut from the ECB and another month of weak jobs growth in the U.S.
Some people may argue that the dollar gained strength last week because the NFP report was not bad enough to push the Federal Reserve to pull the trigger on a third round of quantitative easing, but the selloff in equities suggests otherwise. Investors were clearly disappointed by the employment numbers, and this only compounded fear and concern in the financial markets. In addition to the pessimistic comments from ECB President Mario Draghi and the below-100,000 nonfarm payrolls print, the People's Bank of China announced a surprise rate cut -- and all pointed to weakness in the global economy. The fear is that the third and fourth quarters will turn out even worse than the first and second quarters did....409 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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