The EU Morning Report - Yen Reached its 6-Year Low at 111 - 31 October 2014


Currencies

  • The euro (EUR) continues the downside as it reached a monthly low at 1.2546 against the US dollar (USD). The Fed officially ended its quantitative easing (QE) program and Fed officials believe that inflation will not be influenced by the end of QE but the increase of interest rates will help inflation to reach the target of 2%.
  • The US dollar (USD) reached a new record high at 43.62 before dropping back to 41.51 against the Russian Ruble (RUB). The ruble had its biggest gains as the Russian central bank is ready to act in order to support its currency. The bank will probably increase its interest rates for a fourth time this year up to 8.5%.

Equities

  • Japan 225 (NKI) climbed from 15863 all the way up to 16578 recording a new seven year high. The Japanese stocks rose as the Bank of Japan (BoJ) unexpectedly increased its monetary policy and Japan’s pension funds are seeking for new asset allocation.

Commodities

  • Soybeans (SOY) rose up to 1052 USD cents per bushel and reached a new two months highThe commodity rose on concerns that the dry weather will hurt Brazil’s crops.

Mover & Shaker with forex options

  • The US dollar (USD) skyrocketed up to 111.17 yesterday against the Japanese yen (JPY) and reached its lowest level since 2008. The yen crashed after the Bank of Japan (BoJ) decided to increase its monetary policy from 70 to 80 trillion yen.
  • Option traders may consider buying a Call on the USDJPY and gain if the pair continues the bullish rally, while the risk is limited to the premium paid.

Written by Evdokia Pitsillidou
Currency Strategist at easy-forex®