Currencies
- The euro (EUR) dropped against the US dollar (USD) to 1.3356. The single currency trades near its lowest level since November. Today the European Current Account will be announced and is expected to be at 19.3B.
- The US dollar (USD) rose against the Japanese yen (JPY) to 102.56. The greenback is under pressure as the yearly US Core CPI will be announced today and is expected to rise by 2.0%. A better CPI will boost demand for dollar as signs of earlier increase in interest rates will rise.
Equities
- The US equities gained yesterday as tensions in Ukraine and Middle-East eased. The US 500 (SPI) advanced to 1969, the US 30 (DOW) climbed to 16817 and the US Tech (NDQ) went to 4019.
Commodities
- Wheat (WHT) dropped to 539.75 USD per bushel as the tension between Ukraine and Russia might disrupt exports from the Black Sea and that the rain forecasted in Australia may boost the supply of wheat.
Mover & Shaker with forex options
- The British Pound (GBP) remained range bound against the USD dollar (USD) to 1.6720 as the yearly UK CPI is coming ahead today and is expected to rise by 1.8% This will be a test for the cable, as a possible rise in CPI will increase speculations for earlier increase in interest rates. As volatilities remain low, options buyers are finding bargain strategies to capitalise on market movements.
- Option traders may consider constructing a Straddle on the GBPUSD and gain if the pair moves in either direction, while the risk is limited to the premium paid.
- A Straddle can be constructed by buying an at the money Put and an at the money Call.
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EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
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