The EU Morning Report - Euro Trades Near its 2 Year Low; Yen is Near 120 - 19 December 2014


Currencies

  • The euro (EUR) continues the downside and trades near its 2-year low at 1.2282 against the US dollar (USD). The single currency weakened after the Fed signaled a hike of interest rates early next year.
  • The US dollar (USD) remains bullish against the Japanese yen (JPY), as it climbed up to 119.46. The yen weakened more than 400 pips within 3 days as Bank of Japan (BoJ) maintained its stimulus measures.

Equities

  • The US equities extended their gains as the US economy is growing and Fed decided to be patient on increasing interest rates. The US 500 (SPI) trades near record highs at 2073, the US 30 (DOW) rose up to 17841 and the US Tech (NDQ) climbed up to 4297.

Commodities

  • Wheat (WHT) climbed up to its highest level since May at 676.50 US dollars per Bushel, on speculation that Russia may curb exports.

Mover & Shaker with forex options

  • The US dollar (USD) skyrocketed up to 0.9848 against the Swiss Franc (CHF) and recorded its 2 year high. The franc declined after the Swiss National Bank (SNB) imposed negative interest rates yesterday.
  • Option traders may consider buying a Call on USDCHF and gain if the pair continues the rally, while the risk is limited to the premium paid.

Written by Evdokia Pitsillidou
Currency Strategist at easy-forex®