Pound Slips on All Fronts
There is mixed behavior when it comes to the greenback this morning. Investors are not sure if it is worth it for them to invest in the U.S. currency. It is important to understand that U.S. growth has been less than 1 percent per year in the past two years. Moreover, investors are awaiting data from the leading economic before making a decision on the USD this Wednesday.
The euro is trading higher for the third straight trading day versus the dollar. The EUR/USD forex pair has climbed 0.03 percent to $1.3440. This is even though data this week may show factory output slowed as growth slumped in the Eurozone. The euro has managed to climb vs. most of its peers, as traders have a lot of confidence in the forex market this morning. Look for the euro to extend its gains today.
The pound sterling is trading lower against all of its major currency counterparts this morning. Investors are in the mood to ditch the British currency, as it is simply not offering them high enough returns. Moreover, it was overvalued during the previous trading week. With inflation slowing more than forecast in the U.K. during the month of October, this really hurt the GBP. The GBP/USD pair is trading lower this Wednesday morning by 0.09 percent at $1.5890. The pound has also lost a lot of ground versus the euro in the latest trading.
There was much weakness for U.S. stocks and indices on Tuesday. This is after the commodity gained in previous sessions. There was just was not the required enthusiasm support equities.
It seems that the forecast of an end to stimulus amid the bullish American economy has encouraged traders to go short on Tuesday.
The Dow Jones Industrial Average slipped 0.2 percent to the 15,750.67 level. The S&P 500 dived 0.2 percent to 1,767.69.
Facebook gained 0.4 percent to $46.60. Bank of America slumped 0.56 percent to $14.32.
Traders may be cautious with U.S. stocks today following yesterday’s losses.
There is a lot of weakness for crude oil at the moment. The commodity dropped a massive 2 percent during yesterday’s trading session. Investors were simply not interested to take big risks. This is prior to government data today which is expected to show that crude oil inventories rose to their highest level since June in the United States. The good news is that the black gold is trading higher this morning by 8 cents on the New York Mercantile Exchange. With the prediction that the U.S. will surpass Saudi Arabia and Russia as the world’s largest oil producer by 2015, this has pushed investors to sell crude.
Gold has been unable to make the necessary gains in recent trading days. In fact, the commodity is eying its first annual decline since 2000. The good news is that crude prices are higher this morning by about $2. This is as there is a lot more confidence in previous metals. However, the gains are not strong enough in gold to show that traders have 100% confidence in the commodity.
We saw a lot of weakness with regards to the Dow Jones yesterday. Traders were simply not in the mood to make big risks when it came to one of the most traded U.S. indices. This is due to the Dow being somewhat overvalued recently. Therefore, traders decided to unfold their long positions. With more losses possible this Wednesday, look to open Put options in the Dow Jones.