Dollar Goes Much Lower in Wednesday Morning Trading- 21/05/2014

Currencies

USD

The dollar has gone much lower following the weakness we saw for American stocks yesterday. With traders being of the view that American equities were overvalued, this ended up helping traders going bearish on U.S. assets. However, the case for the U.S. dollar this morning is also weakness. In other words, when speaking of the currency market traders are willing to take a lot of risk. The dollar has tumbled versus the Swiss franc and yen in the latest round of trading.

EUR

There has been a lot of downward pressure on the euro in recent trading sessions. Investors felt that it was the right time for them to ditch the currency due to it being overbought. The thing is that the European single currency has been able to make a mini comeback in the latest round of trading. The EUR/USD pair is trading higher as of now by 0.12 percent at the $1.3717 level. The euro has also made inroads into a number of its other peers, so look to go long today.

JPY

The yen is by far the strongest currency this Wednesday morning. It is trading higher on all fronts due to there being many risks in the markets and the weakness we saw in U.S. stock during yesterday’s trading session. The JPY is very strong after the Bank of Japan held back from expanding its monetary stimulus program. It foresees its economic recovery to continue, meaning the yen will gain additional support.

 

Stocks/Indices

We saw U.S. stocks end up making some very big losses during yesterday’s trading session. Investors were simply not in the mood to take very big risks. Instead they took it upon themselves to put their funds in assets which carry with them fewer risks. In addition, U.S. equities were very much overbought, so the losses which we saw during the U.S. session on Tuesday were not a surprise.

The Dow Jones Industrial Average dipped 0.83 percent to the 16,374.31 level. The S&P 500 made losses of 0.65 percent to 1,872.83.

Bank of America Corp. declined 0.95 percent to $14.53. Cisco Systems dipped 0.94 percent to $24.12.

 

Commodities

Crude Oil

There has been a lot of movement when speaking of the crude oil binary open in recent trading sessions. Crude oil futures are trading higher as of now by 79 U.S. cents at the $103.15 level.  The crude oil binary option has ben helped this morning by the much weaker greenback. Investors feel that there is more strength for the commodity in the future.  Investors are waiting to see if U.S. supplies dipped again, then this could really give the commodity a big boost. Therefore, daily Call options is the way to go.

Gold

Gold is flat this morning at the $1,294.40 level. Traders are not in the mood to go long on the metal due to the risks which it entails. The reality I that there is a lot of risk taking in the commodity market this morning. That is why traders are not in the mood to buy yellow metals. This means that you may want to look into opening daily Put tons in gold once you get a free chance.

 

Wild Card

Dow Jones

The Dow Jones ended up taking a very big hit during yesterday’s trading session. Investors just felt that they should take their money out of leading U.S. indexes and put them into less risky assets. If there ends up being positive U.S. data this afternoon, then we will see the Dow Jones go much higher.