Euro in High Demand
There is a lot of demand for the dollar this morning after the slump which we saw on Wall Street during Tuesday’s trading session. Traders prefer haven currencies right now due to the forecast that the U.S. Federal Reserve will cut economic stimulus. This shows just how volatile the financial markets are at the moment. The GBP/USD forex pair is trading lower as of now by 0.08 percent at $1.6369. The USD has also jumped versus the CHF and CAD.
The European single currency is in very high demand this morning. This is before members of the European Central Bank meet for a policy meeting on Thursday. They are set to refrain from cutting the region’s interest rate. This is why traders feel that it is now that they should open Call options in the EUR. Data in the coming hour will be crucial in determining how strong the euro will be at day’s close.
The weakness for the Australian dollar is continuing this morning. This comes after the nation’s economy grew less than analysts had forecasted in November. The fact is that there has been very little demand when it has come to the Australian currency in the past week of trading. In fact, the AUD is trading lower by a whopping 1.1 percent versus the greenback today.
We saw another day of weakness when it came to U.S. stocks during yesterday’s trading session. Traders just felt that it was the right time for then to sell stocks. Traders just are not in the mood to take risks with regards to U.S. equities at the moment. This is because they prefer to wait on the sidelines until the deed gives clear signals with regards to what measure it will take with the American economy.
The Dow Jones Industrial Average dipped 0.59 percent to the 15.914.62 level. The Nasdaq Composite Index made losses of 0.2 percent to 4,037.20.
Crude oil futures are trading higher for a fourth day, which is the longest upward streak since August. This is after data showed that U.S. crude oil inventories fell. Stockpiles shrank by 12.4 million barrels during the previous trading week. Traders are of the view that crude oil was oversold in the previous week of trading. Therefore, it is somewhat of a relief that prices are higher this morning.
The commodity is higher this morning by $1.13, as traders feel that there could be additional gains ahead when it comes to crude.
There is little demand for the gold binary option at the moment. It went much lower yesterday, and has slumped this morning. Traders are not sure if now is the right time to put their funds into precious metals. This helps us understand why gold prices are so low this morning. Traders will want to follow the strength of the dollar today, as this will be crucial in driving the gold binary option. For example, 1 reason why gold is weak today is due to the much stronger dollar.
The Dow Jones has made some big losses in the past few trading days. Investors just do not feel like taking risks when it comes to the leading U.S. indexes. The prospect is that the Fed will scale back stimulus has led to a lack of risk appetite with regards to investing in the markets. Traders are waiting until the U.S. publishes more data. It may be that the Dow will make a bullish comeback in the U.S. session.