Dollar Weakened Ahead of FOMC Statement


Currencies

  • The euro (EUR) continues its bullish trend reaching 1.2764 against the US dollar (USD) as monthly US Durable Goods Orders where worse than expected at -0.2% decrease while the expectations were 0.5% increase of orders. The single currency is under pressure as the Federal Reserve will announce the interest rate and is expected to be at 0.25%.
  • The US dollar (USD) climbed to 108.18 yesterday against the Japanese yen (JPY) as the US CB Consumer Confidence were better than expected at 94.5 which is a record high since January 2008, while the expectations were at 87.4. The greenback weakened the last three days against major peers before the FOMC Statement later today at 18:00 GMT, as investors cut their bets that Fed will increase their interest rates earlier.

Equities

  • US equities gained yesterday as the US Consumer Confidence showed improvement. The US 500 (SPI) advanced to 1980, the US 30 (DOW) went to 16937 and the US Tech (NDQ) to 4099.

Commodities

  • WTI Crude (OIL) rebound to 81.64 USD per barrel yesterday from the two-years low at 79.44, as the investors believe that the Crude Oil Inventories today will be less than the expected at 3.3 million barrels.

Mover & Shaker with forex options

  • New Zealand dollar (NZD) continues to climb against US dollar (USD) and is currently trading at 0.7933. The kiwi is under pressure as the Reserve Bank of New Zealand (RBNZ) will announce the Official Cash Rate and is expected to be at 3.5%.
  • Option traders may consider buying a Put on the NZDUSD and gain if the pair moves lower, while the risk is limited to the premium paid.

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