Stocks are lower by up to 3% across the region; Gold made new record highs earlier at $1662 and is presently trading near $1655/oz.
The mood in the market is alarmist. Recent economic data out of the US has been quite horrible and with austerity measures about to be introduced in order to control spending, the engine of the world’s economy is going into reverse. Risk is most definitely off and investors are looking for a safe option, if there is such a thing.
If this mood worsens, then we’ll be back in a similar situation to 2008 when, in the FX markets, the AUD and GBP got thrashed, the EUR remained fairly steady, and the CHF and JPY appreciated.
History seldom repeats itself exactly but the set-up is looking quite similar.
