Dollar Slides for a Second Week on Negative Economic Data
The dollar tumbled for a second straight trading week versus the majority of its most traded currency counterparts. This came about on the release of a string of weak economic data from the U.S. economy. The EUR/USD pair advanced 0.4 percent, while the greenback dipped 0.5 percent versus the Japanese yen. With U.S. retail sales and employment data not coming out with forecasts, this led to much lower demand for the greenback.
The pound sterling ended up being one of the most bullish currencies during last week’s trading session. Traders just felt that it was worth it for them to go long on the British currency. This was somewhat due to it being oversold in previous trading weeks. Moreover, the data coming out of Britain is getting better and better. Therefore, the gains which we have seen for the GBP are not a surprise at all.
The good news is that the Aussie managed to make some very important gains in previous days. Among the most important gains were made against the U.S. dollar. There are diverse reasons why the AUD was able to make inroads into its peers. The fact is that the demand for pacific currencies was very high. There will be a lot of data released from the news wires during the upcoming trading week, so open your weekly positions once Monday’s trading commences for the Aussie.
Stocks in Europe were able to post their biggest week of gains in 2014. This came on the Federal Reserve stating that its stimulus policy will be based on U.S. economic data. This is a signal that the Fed will be more flexible than previously thought. This was great news for traders, and the result was them taking some very big risks when it came to European and global stocks during last week’s trading session.
There were also some impressive gains in U.S. stocks as the trading week passed by. Investors were of the view that it was worth it for them to take risks when it came to equities.
We saw the crude oil binary option get hit in the early part of the previous trading week. The positive news is that the black gold was able to climb as the trading week passed by. It finished Friday’s trading session at the $100.37 level. It seems that the higher supply from Iran is preventing crude from reaching the $101 level. Economic events in the coming week will need to be followed closely while trading oil.
Gold recorded its biggest weekly rally since August as a worsening global economy increased the demand for the haven metal. Another important factor playing into the bullish gold prices last week was the much weaker dollar. With both the dollar and gold trading inversely, then it is perfectly understandable why the much weaker dollar last week ended up supporting gold prices. Among the U.S. economic data which came out weaker in the previous week was the factory orders. More bearish data could end up lending gold prices even more strength once the trading week commences.
One of the most bullish commodities at the moment is gold. Traders feel that the time for them to buy into the yellow metal is now. The reality is that there are simply not many factors backing the precious metal. One of them is the weaker dollar and the other is weak U.S. data. To make high returns in the coming trading week, look to open weekly Call options in gold.