The EU Morning Report - Gold Tumbles as US Dollar Strengthens - 24 October 2014


Currencies

  • The euro (EUR) moved even lower and reached the level of 1.2613 against the US dollar (USD). The single currency remains under pressure despite better than expected European Manufacturing PMI. The pair is now trading around 1.2654 and looks for a catalyst in order to make a rebound.
  • The US dollar (USD) continues strengthening and reached its two week high at 108.34 against the Japanese yen (JPY). The yen declined as the US data continues to support the growing US economy and especially in comparison with other countries.

Equities

  • The US 500 (SPI) rose up to 1955 before the retracement back to 1931. The index slid after they diagnose the first case of Ebola in New York.

Commodities

  • Soybeans (SOY) skyrocketed from 955 all the way up to 999 US dollars per Bushel. The prices of the commodity increased sharply as the dry weather in Brazil may reduce production.

Mover & Shaker with forex options

  • Gold (XAU) lost another 15 dollars from its value and reached its low at 1226 US dollars an ounce. The strong US dollar across the board shift investors towards riskier assets and away from haven assets.
  • Option traders may consider purchasing a PUT on XAUUSD and gain if the pair continues the downside, while the risk is limited to the premium paid.

Written by Evdokia Pitsillidou
Currency Strategist at easy-forex®