Euro Upholds its Gains
The U.S. dollar is very weak at the moment, as traders have decided to take some big risks in the forex market this morning. The fact is that the biggest losers when traders have a lot of risk appetite is the haven currencies such as the dollar and the yen. The GBP/USD currency pair is higher by 0.09 percent at $1.6393.
The euro has managed to uphold it gains this morning versus the dollar, pound and its other main currency counterparts. It is great to see such enthusiasm in the currency market today. In fact, the euro has capped a seven day gain versus the U.S. dollar, showing just what high demand there is for the EUR this morning. All of this comes prior to the speech by the head of the European Central Bank in the European Parliament today. The EUR/USD pair is trading higher by 0.06 percent at $1.3795.
The Australian dollar seems to be one of the weakest currencies at the moment. It is down 15 percent in the last 12 months. This makes it one of the worst performing currencies. This is in contrast to the strength which we saw for the Aussie over a year ago. The fact is that back then the Aussie was overvalued, so the losses which we are seeing are not a surprise.
There was a fall in American stocks for yet another consecutive trading session. Traders felt like going short, which led the S&P 500 to record its first back to back drop in two months. With a new budget accord, this has led to the feeling that Fed stimulus could be trimmed as early as next week.
The Dow Jones Industrial Average dipped 0.81 percent to the 15,843.53. The S&P 500 made losses of 1.13 percent to 1,782.22.
Cisco Systems slipped 1.56 percent to $20.88. Microsoft fell 1.31 percent to $37.61.
Traders feel that the losses we saw on Wall Street yesterday were overdone, so go long today.
Crude oil dipped yesterday following the gains which it made both last weekend and in the early part of the current trading week. The fact is that the commodity is very much overvalued at the moment, which has led traders to ditch the commodity. It is trading lower this morning by several cents. The majority of commodities are lower today, especially energies. However, if the dollar continues its decline into the abyss and if stocks rebound later on, then this could end up lending the crude oil binary option a helping hand.
Gold futures are lower today by about $2, as a number of investors are sitting on the sidelines and waiting for a string of economic data to be released from the leading economies. Gold’s losses are not greater due to the much weaker greenback this morning. The gold binary option is another commodity which is somewhat dependent on the value of the USD. If there ends up being a stock market rally this afternoon, then gold may make a bullish comeback.
There is a lot of bullishness for the EUR/USD currency pair this morning. Traders are in the mood to ditch the U.S. dollar and buy into the European single currency this Thursday. This has been the mentality of traders since the beginning of yesterday’s trading session. The fact is that the euro is in very high demand at the moment, which is why traders will want to look into going long on the EUR/USD pair as the trading day passes by.