Dollar Ends the Week on a High- 20/07/2014

Currencies

USD

The dollar was one of the most bullish currencies during last week’s trading session. In fact, it rallied throughout the week, as global economic and political events seem to be supporting the American currency. The greenback seemed to have gained notably on its haven status. In addition, the Fed is scheduled to raise interest rates soon. Moreover, the crisis in Gaza and the shooting down of a Malaysian airliner over Ukraine led to a rapid turn of events in the markets. What really gave the dollar a helping hand was the positive jobs data. Traders are hopeful that the USD will extend its gains in the week ahead.

CAD

It was great to see that the loonie was a very big gainer during last week’s trading session. Investors were of the view that it was worth it for them to go long on the loonie due to the very high returns which were on offer for them. With the nation’s consumer price index increasing a whopping 2.4 percent, this gave traders the much needed confidence to go long on the Canadian currency. This came two days after the Bank of Canada stated that inflation gains are only temporary. Despite the CAD strength, caution is advised in the week ahead.

EUR

There was a lack of support when speaking of the European single currency last week. The EUR/USD pair dipped below $1.35 for the first time since February, highlighting just how weak the EUR is at the moment. The weakness comes as the European Central Bank has not been able to boost economic growth. There may be further weakness in the coming trading days when it comes to the euro.

 

Stocks/Indices

There was a lot of weakness for Asian stocks during last week’s trading session. Investors simply felt that it was not worth for them to go long after stocks recently hit their highest level in six years. To top this off, the airliner was shot down over Ukraine, which really increased the tensions between Russia and the West.

The MSCI Asia Pacific Index ended up being hit really hard. Index in China and Hong Kong got hit heavily, as traders are now waiting until there is more geopolitical instability.

As long as tension grow, this may be key in putting downward pressure on regional equities. However, a comeback may be on the cards for Asians stocks this coming trading week.

 

Commodities

Crude Oil

The crude oil binary option capped its first weekly gain in a month on the Ukraine crisis. When we speak of crises, we mean the shooting down of a Malaysian airliner by Russian rebels in Ukraine. This has really been dominating the headlines, along with the crisis in Gaza. The fact is that the commodity is undervalued, and there is set to be another week of gains in the coming trading week.

Gold

Gold was higher for much of last week’s session. This has come on the political crises in Ukraine and Gaza. In addition, there has been a lot of economic instability in Europe such as the Portuguese banking crisis. However, gold dipped at the end of the trading week as it came to be known that the Fed may raise rates much quicker than originally thought. Therefore, employ caution when trading gold in the next few trading days.

 

Wild Card

EUR/GBP

There was a lot of weakness when it came to the EUR//GBP in the week that just went by. Traders should look to continue going short, as there is a lack of strength for the euro at the moment.