European Stocks Post Worst Weekly Drop Since May 2012
The greenback capped its best weekly rally since the collapse of the Bretton Woods system in 1971. This came as the Fed expressed great concern that the strength of the greenback posed a big threat to the U.S. economic recovery. The Federal Open Market Committee officials stated that growth may be lower than originally expected if the dollar continues its surge. However, the FOMC did state last month that they intend to keep interest rates low for a considerable period of time after the asset purchasing program brought to a close. More gains for the dollar are forecasted in the coming trading days.
One of the most unpredictable currencies at the moment is the Canadian dollar. Traders have been in favor of going long on the loonie after there was the release of figures showing a drop in the Canadian jobless rate. This as good news for those of you who decided to put your money into the CAD in recent trading sessions. It seems that as long as the U.S. economy improves, this tends to have a knock-on effect on the Canadian economy.
The pound did show some strength last week against some of its main currency pairs, but the thing is that it took a big hit on Friday. This was after the ruling Conservative party lost a by-election, showing that it is unlikely that they will be able to win a majority in the next general election. The GBP/USD forex binary option made losses on Friday alone by 0.26 percent to end the session at the $1.6075 level. The thing is that traders feel that the pound will make important gains once the upcoming trading week gets going, open weekly Call options in the GBP/USD on Monday.
It was unfortunate to see that European stocks posted their worst week of trading since May 2014, showing just how valid the fears are at the moment when speaking of the European economic recovery.
What really pushed stocks in the region during the week that just passed was the fear that there will be very big obstacles to revive the region’s economy.
One of the biggest losses was the Stoxx 600 Index, as there was just no confidence amongst traders.
There were various other factors which ended up pushing stocks in the region much lower. The International monetary Fund cut the global growth forecast. To top this off, German industrial output dropped the most since 2009.
Trades will ne to be very cautious while trading European stocks in the week ahead.
It was unfortunate to see that crude oil post weekly declines, as traders decided to take their funds out of energies. Instead, they decided put their funds into assets which seemed to promise much higher returns. They just did not want to take the big risks which are associated with some commodities at the moment. Tea me mentality may spill over into next week’s trading session, so take note of this.
It was the case that the gold binary option made some important gains for much of last week’s trading session. The thing is that the yellow metal got hit hard on Friday, and tumbled from its highest price level in two weeks. All of this happened due to the much stronger dollar. However, do not be surprised if the gold binary option climbs in the next few trading days.
More losses for crude oil may lie ahead, so look to open weekly Put options on Monday.