Dollar Surges to a 6-Month High
The U.S. dollar surged to a six-month high versus the yen on the forecast that the strengthening U.S. economy will encourage the U.S. Federal Reserve to scale back stimulus. This comes at a time when Japanese officials are more determined than ever to boost even more economic stimulus into the Japanese economy. The AUD/USD pair is lower this morning by 0.25 percent at 90.83 U.S. cents. The USD/JPY pair is up 0.22 percent at 103.16 yen.
The pound sterling is trading higher versus the euro for a fourth straight trading session. This is after a report showed that the nation’s manufacturing is better than was previously forecasted. This has led traders to buy the British pound on all fronts this Tuesday morning. The GBP/USD currency pair is trading at its highest level since August 2011. This is after another report showed that British house prices climbed notably in November.
We are seeing much weakness when it comes to the Australian dollar this morning. Investors are of the view that it is not worth it for them to put their money into the Aussie. This is following the move by the Reserve Bank of Australia to hold interest rates at 2.5 percent. The Australian dollar may continue sliding in the next few hours of trading.
There was a fall in U.S. stocks during yesterday’s trading session, which actually led Asian stocks outside of Japan to slide this morning. The weakness for U.S. stocks on Monday was largely due to the fear that holiday sales may disappoint.
The Dow Jones Industrial Average finished Monday’s trading session lower by 0.48 percent. The S&P 500 dipped 0.27 percent. The Nasdaq Composite Index made losses of 0.36 percent.
Facebook was able to advance yesterday by 0.11 percent to $47.06. Cisco Systems dipped 0.75 percent to $21.09.
It may be that yesterday’s losses were overdone, so expect there to be a bullish comeback later on.
The crude oil binary option is trading higher for a third straight trading day due to the forecast that U.S. stockpiles will fall. This would be compounded with the fall in production from OPEC. With U.S. manufacturing climbing more than was forecasted in the previous month of trading, this encouraged traders to go long on the black gold. The crude oil binary option is trading higher this morning by 2 cents at the $94.11 level. If the dollar dips, this may end up boosting crude oil prices further.
Gold is trading higher this Tuesday morning by $1.30 at the $1,223.20 price level. This is after the commodity fell to its lowest rate in five months yesterday. Traders felt like ditching the yellow metal on Monday on the likelihood that the Fed will cut stimulus, decreasing demand for the metal. Gold is down a whopping 27 percent this year. It is a commodity that you may want to stay away from. Therefore, wait until more global data is released from the news wires this afternoon.
One of the most bullish currency pairs this morning is the GBP/USD. We have seen the pound go much stronger in the past week or so. This is because there has been a string of economic data released from the news wires in favor of both the pound and the British economy. Therefore, it is no surprise that traders feel like taking risks when it comes to the pound sterling these days. It may be that the GBP/USD pair will go higher than its current level later.