U.S. Stocks Hit on Fed Tapering Remarks
The dollar is trading higher against the majority of its peers this morning. Traders are of the view that it is worth it for them to go long on the greenback following comments by Fed officials yesterday that there will be more tapering ahead. The EUR/USD forex binary option is trading lower this Thursday morning by 0.26 percent at the $1.3698. The greenback has also made inroads into a number of its other peers this morning.
The euro was one of the strongest currencies in previous trading sessions. However, the euro is trading much lower versus its peers this morning. Among its biggest losses have been capped versus the dollar and the pound. Traders are of the view that the EUR is somewhat undervalued. The losses also come on German stocks sliding in the latest round of trading. Look for the euro to go been lower later on this Thursday.
The Canadian dollar is holding tis ground versus the greenback. This is despite there being a lot of risks in the currency market this morning. The fact is that the Canadian economy is fairly healthy, and the loonie is more stable than a number of its other main currency counterparts. Therefore, the CAD making additional gains this Thursday is highly likely. As a result, going short on the USD/CAD pair is the way to go.
It was unfortunate to see that U.S. stocks took such a beating during yesterday’s trading session. Investors felt that it was good for them to go short due to the high risks in the markets. Moreover, officials from the Fed stated that there will be additional Fed tapering. Therefore, it is no wonder that investors decided that the time was ripe for them to go short on risky America equities.
The Dow Jones Industrial Average made losses of 0.56 percent to 16,040.56. The Nasdaq Composite Index slumped 0.82 percent to 3.652.84.
Bank of America Corp. tumbled 164 percent to $16.20. Facebook Inc. climbed 1.13 percent to $68.06
The crude oil binary option is trading lower this morning by 12 cents at the $102.73 level. It has fallen from its highest price level since October in the Chinese manufacturing sliding. Now there are fears that the demand for the commodity may fall from the world’s second largest consumer. The fact of the matter is that there are so many factors driving the commodity at the moment. For example, the cold weather in much of America has driven up crude prices, may put upward pressure in the latter hours of trading today.
Gold futures are lower at the moment by about $6.10. Traders have taken the chance to ditch commodities today. It is also vital to know that gold was one of the most bullish commodities and metals in the former part of the currency trading week. However, traders see that there is a lot of downward technical pressure at the moment. This has resulted in many of them deciding to sell the metal. As a result, more losses may lie ahead for gold.
It is unfortunate to see that the Dow Jones has turned out to make such big losses recently. Investors just feel that it is simply not the time for them to go long on the index. This is due to the instability in American indices. You should know that a dominant factor that has pushed down equities and indices this morning are the comments by Fed officials that stimulus will continue to be cut.