The EU Morning Report - Aussie Slumped to a 4-Year Low - 26 November 2014


Currencies

  • The euro (EUR) rose for second consecutive day at 1.2486 against the US dollar (USD) yesterday. The single currency rebounded from almost two years’ low after the ECB Press Conference on Friday announced that they are considering to add more monetary stimulus measurements. Today the US monthly Core Durable Goods Orders will be announced with expectations at 0.5% increase.
  • US dollar (USD) dropped from 118.45 to 117.68 against the Japanese yen (JPY), as the US CB Consumer Confidence came out to be worse than expected at 88.7, while the expectations were at 95.9. Despite the better than expected US quarterly Preliminary GDP, the greenback fell as investors saying that it moved already a long way. Today the US Home Sales and the US Unemployment Claims will be announced and are expected to be at 471K and 287K respectively.

Equities

  • US equities gained on US GDP announcement that came out to be better than expected. The US 500 (SPI) reached a new all-time high at 2072.5, the US300 (DOW) climbed to 17831 and the US Tech (NDQ) rose to a new all-time high at 4302.6.

Commodities

  • WTI Crude (OIL) fell from 76.56 to 73.70 USD per barrel ahead of the OPEC Meetings tomorrow. Today the Crude Oil Inventories will be announced with expectations at 0.4 million barrels.

Mover & Shaker with forex options

  • The Australian dollar (AUD) fell for the second consecutive day, while reaching a 4-year low at 0.8513, as the Governor of Reserve Bank of Australia (RBA) said that the currency might depreciate even more due to fall in commodity export prices. Earlier today the Australian quarterly Construction Work Done came out to be worse than expected as it dropped by -2.2%, while the expectations were to drop by -1.7%.
  • 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®