Dollar Surges to a 4-Month High

Dollar Surges to a 4-Month High

Currencies

USD

The dollar touched a four month high versus a number of its main peers on signs that there is an improvement in the employment data. This has increased the chances that the Fed will take this as a sign to put an end to economic stimulus. It is expected that U.S. jobless claims fell, which has lent the dollar a helping hand this morning. Traders may actually want to sell the dollar in the hours ahead.

CAD

The USD/CAD is trading at the highest level since 2010 on the prediction that the Bank of Canada will not raise interest rates. Traders are of the view that it is simply not worth it for them to take risks with the loonie. This is a signal that economic growth is not strong enough. Therefore, you may want to be cautious while trading the Canadian dollar in the coming days. Look to go long on the USD/CAD currency pair in the next few hours.

AUD

The Australian dollar is trading lower for the third straight trading day versus the greenback and its other peers on the forecast of the Fed slashing economic stimulus. Traders are of the view that it is time for them for selling the Aussie, as it is simply not providing them high enough returns at the moment.  Among the biggest losses for the Aussie as of late have been made against the greenback. Traders will want to continue selling the AUD as the trading day prolongs.

Stocks/Indices

There was an unexpected slump in stocks during yesterday’s trading session. Investors were in the mood to go short due to the positive jobs data increased the likelihood that the Federal Reserve will slash stimulus. The thing is that such a move will acutely help the U.S. economy in the long term.

The Dow Jones Industrial Average dived 0.41 percent to 16,462.74. The Nasdaq Composite Index actually rose 0.3 percent to the 4,165.61 level.

Bank of America Corp. jumped 0.48 percent to $16.58. Microsoft Corp. dipped 1.79 percent to $35.76.

Commodities

Crude Oil

Crude oil is trading near a six week low on surging U.S. fuel stockpiles. With the higher supply, it is no wonder that traders have decided to go short this morning. The crude oil binary option is higher as of now by 34 cents at the $92.68 level. Traders feel that it is the time for them to buy into crude after sliding 5.8 percent since the start of the year. Crude may continue climbing after sliding $1.34 yesterday.

Gold

One of the most important movers lately has been gold. The commodity has managed to climb $1 this morning. It is important to understand that there is not a lot of volatility for gold these days, because traders feel that they will need to wait for the unfolding of events before making some really big decisions. This has been the mentality of traders. It may be that gold will continue to build on its gains this afternoon, so going long on the metal seems like the right way to go.

Wild Card

Nasdaq Composite Index to surge again

There was a lot of strength when it came to the Nasdaq Composite Index yesterday. This was despite there being much weakness for other indexes. This shows just how the markets move these days. Therefore, you will need to follow the release of each event as it is published from the news wires in the coming hours of trading. Calls for the Nasdaq Composite index seem like the way to go in the next few hours.