U.S. Stocks Climb on Higher U.S. GDP
The dollar was able to climb for an eighth week in a row versus the yen. This marks its longest winning streak since the month of February. The strength for the USD/JPY pair is owed to the Federal Reserve deciding to cut stimulus for the U.S. economy. On the other hand, the Bank of Japan has decided to boost more stimulus into the Japanese economy. Therefore, it is no wonder why the pair has been so strong lately. The USD/JPY pair surged 0.9 percent to 104.10 yen during last week’s session.
When speaking of weak currencies, the yen seems to come to mind. Investors have simply not been in the mood to go long on the yen as the Bank of Japan has taken the drastic decision to put more money into the nation’s economy. Traders are expecting the yen to make even more losses in the coming days of trading, which means you will want to go short on the Japanese currency.
The Canadian dollar dropped for the fourth time in five weeks versus the U.S. dollar. Traders just did not feel that it was the time or them to go long on the loonie. This came after the Fed cut stimulus for the American economy. It was not really any surprise that the USD/CAD pair surged during last week’s trading session.
It was good to see that stocks were able to end the week on a high, as they were lower for a lot of last week’s trading session. The Fed tapering seems to drive much of the movement when it comes to U.S. equities. The fact is that there is much speculation which allows many traders to make high returns from the financial markets.
The rally at the end of last week was owed to U.S. GDP topping forecasts. This may end up helping equities in the week ahead.
The price of crude oil gained last week by 2.8 percent. This came due to U.S. GDP rising 4.1 percent in the third quarter. This is much higher than the previous estimate of 3.6 percent. It seems that traders have reacted positively to the decision by the U.S. Federal Reserve to cut economic stimulus. They are of the view that the strengthening U.S. economy is a reason to go long on crude oil. This means that you will want to follow the movement of crude oil as the trading week passes by. This will at least give you the chance of earning high returns from the commodities market as the trading week passes by.
We saw the gold binary option did make some very big losses during the previous week of trading. With the U.S. deciding that it is time to cut stimulus, investors took the opportunity to sell gold on all fronts. In fact, gold hit the lowest level in three years. It was able to rise from this level on Friday, but the Fed stated that there may be additional losses for the bullion in the days and weeks ahead.
There was a lot of strength when it came to the Dow Jones last week. Investors were not in the mood to go long on the Dow for much of the time due to the risks which we saw in the financial markets in the previous trading days. It is true that there were gains in this leading U.S. index on Friday. It is expected that the Dow Jones will build on its gains in the coming week.