Dollar Gains as Fed is Forecasted to Extend Tapering Measures
There is a lot of strength for the U.S. currency this morning on the forecast that the Federal Reserve will extend tapering measures. This is even though recent data has showed that American growth is slowing down. The EUR/USD pair is trading lower this morning by 0.1 percent at the $1.3682 level. The dollar has also made some important inroads into the loonie and the Aussie this morning.
There seems to be a lack of demand when it comes to the euro in the latest round of trading. The euro has made some big losses versus the pound and the yen this morning, as traders seek to put their money into alternative currencies. This has been the case since the beginning of today’s trading session. There will need to be the release of much positive economic data in the hours ahead in order to help the EUR make a positive comeback.
The yen has been much stronger during the current trading week. It is eying its biggest week of gains since the month of September. With risks growing in Chinese industry, this has increased the demand for Japanese assets as a haven. In fact, the yen is the best performer among its peers so far in 2014. It has climbed nearly 2 percent versus the American currency. This is following the 18 percent fall which we saw in 2013.
The top stocks on Wall Street went lower during yesterday’s trading session on very weak data coming out of China. China has enjoyed very high growth in recent years, but there are many signs that this will soon come to an end. This has resulted in traders ditching stocks and indices on Wall Street. It is important to take into account that U.S. equities are overvalued, which led traders to take out their profits during the previous trading session.
The Dow Jones Industrial Average dived more than 1.07 percent to 16,197.35. The Nasdaq Composite Index and S&P 500 made some very big losses.
Traders should be cautious while trading American equities today.
Crude oil futures have managed to gain for the fifth straight trading day, eying the biggest weekly advance since December. This comes after a U.S. government report showed U.S. stockpiles slumped. The crude oil binary option is trading higher this morning by 43 cents at the $97.76 level. Traders foresee crude price hitting $100 again in the next week or two. Therefore, you will need to be very focused while trading the commodity. Look to go long today in order to make high returns from the top rate commodity.
There were some important gains for crude oil in the previous trading session, but traders have decided to go short in the yellow metal this morning. Traders feel that it is time for them to go short on the commodity today after the gains were overdone in the earlier part of the trading week. This means that you will need to be very cautious while trading the metal. Going short in gold futures seems to be one of the most popular trades today.
There was a big slump on Wall Street on Thursday. Traders just were not in the mood to take big risks. This was because a number of economic published weak data. Also, traders sold the Dow Jones as they foresee further losses ahead. As a result, going short on the Dow in the hours ahead may turn out to be very profitable for you.