Dollar Mostly Lower on U.S. Stock Surge
The dollar is trading lower versus most of its peers this morning. Traders are of the view that they should go short on the greenback, as there is a lot of optimism on the financial markets. It is important to take into account that there was a rally in American equities during yesterday’s trading session. This was great news, and the dollar is facing the consequences. It has tumbled versus the Aussie, loonie and a number of its other main peers this morning.
The euro has tumbled versus the majority of its peers this Wednesday morning. Traders are of the view that they should go short on the EUR due to the economic concerns. The fact is that the EUR has been overvalued in previous trading session, so the weakness we are seeing at the moment is not a surprise. Another big reason for the EUR weakness this morning is that ECB President Mario Draghi did not signal any further monetary stimulus. Therefore, the EUR/USD pair may continue sliding later on.
It is true that the pound has not performed as well as many had hoped in previous trading sessions. In fact, traders felt that it was best for them to go short on the GBP due to the lack of returns that are in it for them. The good news is that the pound sterling is trading higher versus the greenback and the euro this morning. The reality is that the GBP has been oversold. This means further gains are likely this afternoon.
We did see some very big losses for America stocks prior to yesterday. The thing is that there was a bullish comeback on Tuesday when it came to U.S. stocks. Traders realized that the losses which we have seen for American equities yesterday were overdone.
This came as health care and commodities shares surged. Moreover, we saw consumer confidence hit its highest level in six years.
The S&P 500 managed to gain 0.4 percent to the 1,865.62. The Dow Jones Industrial Average advanced 0.6 percent to 16,367.88.
Bank of America Corp. made losses of 0.92 percent to the $17.21 level. Facebook Inc. jumped 1.23 percent to $64.89. Intel Corp. made gains of 1.35 percent at $25.46.
Traders are of the view that there will be a second straight day of gains this Wednesday afternoon.
The crude oil binary ton is in high demand today. In fact, it has made a bullish comeback in the past few adding days. The commodity is higher as of now by 6 cents at the $99.36 level. There are a number of factors that are determining the value of the commodity at the moment. One factor that has boosted it today has been the much weaker dollar. There could be more gains for crude later.
Gold futures are higher this morning by more than $5. Investors feel that it is the right time for them to go long on the yellow metal on the much weaker dollar. Moreover, gold has suffered greatly in the past week or so. If we see the greenback continue to decline, then this could end up bribing the gold binary option even more strength.
Traders have taken it upon themselves to sell the gold binary option for quite a while now due to investors taking out their recent profits we made. What we are seeing in the latest round of trading is the gold binary making a comeback. As a result, look to open daily Call options in gold.