The EU Morning Report - The sterling climbed up to its four year high - 17 April 2014

Written by the team


Currencies

  • The euro (EUR) rebounded from is low at 1.3789 up to 1.3850 against the US dollar (USD). The euro erased part of its losses as the Fed chair, Janet Yellen, stated yesterday that Fed has a commitment to support the US economy.
  • The British Pound (GBP) skyrocketed almost 120 pips and climbed up to its four year high at 1.6836 against the US dollar (USD). The sterling made a rally yesterday after the UK unemployment rate fell down to 6.9%, far below the expectations of 7.2%.

Equities

  • The European stocks rallied as companies reported their financial results and the EU Stocks 50 (ESX) rose from yesterday’s low at 3009 all the way up to 3091.

Commodities

  • Natural Gas (NGS) swing between gains and losses and is now trading around 4.550 US dollars per mmBTU. The energy is under pressure as the Energy Information Administration will release its weekly Natural Gas Storage report at 14:30 GMT and forecasts show 35 Billion held in the underground storage during last week.

Mover & Shaker with FX Options

  • The US dollar (USD) increased sharply from 1.0958 all the way up to 1.1032 against the Canadian dollar (USD). The loonie depreciated after the Bank of Canada (BoC) press conference, which was dovish and signalled slow growth on exports.

  • The monthly Canadian CPI due at 12:30 GMT and options traders may consider constructing a Bull Call Spread on USDCAD  as the pair may continue its upside.
  • A bull call spread can be constructed by purchasing an at-the-money Call and selling an out-of-the-money Call.

Written by Evdokia Pitsillidou
Currency strategist at easy-forex