The EU Morning Report - Gold Crashes to 8-Month Low - 12 September 2014


Currencies

  • The euro (EUR) remained range bound yesterday at 1.2922 against the US dollar (USD). The president of European’s Central Bank (ECB) Draghi said during his speech at Milan yesterday, in order to boost lending and reduce financial breakup, banks have to move money between European countries freely. Today the monthly European Industrial Output will be announced with expectation to rise by 0.6%.
  • The US dollar (USD) continued its bullish trend against the Japanese yen (JPY) while recorded a new six-year high at 107.38. Yen is under pressure as the Bank of Japan’s Governor, Kuroda, will speak today about the future of Japan’s economy. Today the monthly US Core Retail Sales with expectations to rise by 0.2% and the US Preliminary UoM Consumer Sentiment will be announced and is expected to come out at 83.2

Equities

  • US equities gained yesterday. The US 500 (SPI) gained from the energy companies yesterday closing at 1996, the US 30 (DOW) dropped to 17042 and the US Tech climbed to 4095 as Apple continues its bullish trend from the new products announcement.

Commodities

  • WTI Crude (OIL) fell from 91.69 to 90.43, setting a 14-month low, before rebounded back to 93.42 yesterday, as inventories data forecast that inventories shrank.

Mover & Shaker with forex options

  • Gold (XAU) recorded an 8-month low earlier today at 1232. The precious metal dropped as speculations that the US interest rate will rise sooner than expected while the demand for gold gets weaker, setting it as an alternative investment.
  • 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®