The EU Morning Report - Hong Kong Braces as Hang Seng Crashes - 30 September 2014


Currencies

  • The euro (EUR) rose from 1.2665 to 1.2689 yesterday, against the US dollar (USD). The pair is still under pressure as the EU inflation data will be announced today with expectation at 0.3%. Despite that the European Central Bank (ECB) said that devaluating euro is not part of policy target, investors believe that ECB approved it in order exports become more competitive and boost inflation.
  • The US dollar (USD) reached a six year high at 109.74 before retraced back to 109.39 against the Japanese yen (JPY). Dollar continues to strengthening despite the better data from the Japanese yearly Retail Sales which appeared higher at 1.2%, while the expectations were at 0.4%, yen. Today the US CB Consumer Confidence will be announced and is expected to be at 92.2.

Equities

  • The Hong Kong 50 (HSX) crashes to 22860 following the unrest. The Japanese 225 (NKI) fell to 16187 as the Japanese Industrial production fell to -1.5% while the expectations were at 0.2%.

Commodities

  • Soybeans (SOY) has its biggest gain yesterday since last week at 923.63 US cents per bushel. Soybeans fell 29 percent this year as stockpile expectations seems to grow.

Mover & Shaker with forex options

  • The Australia dollar (AUD) rebounded to 0.8752 this morning against the US dollar (USD) after reaching an 8-month low at 0.8684. Aussie is still under pressure as the Australian yearly Retail Sales will be announced tomorrow with expectation to be rise by 0.4%.
  • Option traders may consider buying a Put on the AUDUSD and gain if the pair moves lower, while the risk is limited to the premium paid.

Written by Demetris Constantinou
Currency Strategist at easy-forex®