U.S. Stocks Surge for Fifth Week on Economy, Surplus
The dollar gained some considerably ground during the trading week that just passed. Traders have poured a lot of money into equities and indices in the past several weeks due to the very high returns which are in it for them. It is evident that the dollar is very strong, and more strength will lie ahead for the U.S. currency. The thing is that the American economy has been improving notably in recent months, which has in turn lent the greenback a helping hand. Moreover, there has been a slowdown in the British, Chinese and Eurozone economies. To top this off, the by-election win of UKIP in Britain will lead to a further selloff of the pound and much higher demand for the U.S. dollar.
The euro ended sliding by the most in a year versus the yen at the end of the trading week. This came as the head of the European Central Bank Mario Draghi stated that there will be broader asset purchases. The euro reached its lowest level versus the yen since June 2013. In addition, the European single currency slumped versus a basket of other currencies amid traders foreseeing the ECB boosting stimulus measures to increase inflation in the Eurozone.
The Japanese yen tumbled to a seven-year lower versus the U.S. dollar after Japan’s Prime Minister Shinzo Abe announced early elections. The reason why he did this was in order to get a mandate for additional monetary stimulus. All of this has happened as the nation has entered into a recession. In addition, the BOJ has warned that inflation may slip below the one percent level before the end of the month. Therefore, the sooner the elections are over, the fewer burdens there will be on the yen.
Stocks surged for the fifth straight trading week on more signs that the U.S. economy is improving. Moreover, the gains were in large part owed to the news that global central banks from China to Europe will go ahead with some additional stimulus measures. In turn, this led to many U.S. indices and stocks to rise to their highest ever level.
With oil jumping for the first time in eight weeks, this resulted in raw-material and energy stocks making some very important gains.
For the five days ending Friday there were gains of 1.2 percent to 2,063.50 for the S&P 500. The Dow Jones Industrial Average added 1 percent to 17,810.06
The crude oil binary option was able to make some very important gains during the trading week. Investors were in favor of going long as U.S. stocks and indices finished trading on Friday at an all-time high. This was largely owed to the improving American economy, and due to the fact that prices are undervalued. More gains are very likely for the commodity in the coming trading week, so get ready to go long.
We saw the gold binary option jumped to a three-week high on Friday. This came after China cut interest rates to support economic growth. This boosted the demand for precious metals as a store of value. The commodity has surged six percent after sliding to a four-year low on November 7. Traders foresee additional gains in the days ahead.
For those of you who have been trading the financial markets closely in the past few weeks will have seen the Dow Jones make very important gains. As long as U.S. economic data improves, this will lend the Dow Jones further strength.