The EU Morning Report - Euro under Pressure Ahead of ECB - 2 October 2014


Currencies

  • The euro (EUR) slid to 1.2583 yesterday, before rebounded back to 1.2653 this morning against the US dollar (USD). The single currency is under pressure as the European Central Bank’s ECB) Press Conference comes ahead today. Investors speculate that ECB will tell more details about the asset-backed securities and covered bonds that they plan to buy during the press conference and that there will be no more interest rate cuts.
  • The US dollar (USD) crashed to 108.80 after reached the highest level since August 2008 at 110.08 yesterday against the Japanese yen (JPY). The greenback fell ahead of NFP as the US ISM Manufacturing PMI were worse than expected at 56.6, while expectations were at 58.6.

Equities

  • The US equities fell as the US Manufacturing PMI was worse than expected. The US 500 (SPI) dropped to 1941, the US 30 (DOW) fell to 16743 and the US Tech (NDQ) went to 3983.

Commodities

  • Wheat (WHT) rose to 482.38 US cents per bushel as dry weather may approach the curb yields in Australia.

Mover & Shaker with forex options

  • Gold (XAU) fell to 1204.50 near 9-month low before rebounded back to 1219 as dollar and indices retreat, increasing the demand for the safe haven.
  • Option traders may consider buying a Call on the XAUUSD and gain if the pair moves higher, while the risk is limited to the premium paid.

Written by Demetris Constantinou
Currency Strategist at easy-forex®