The EU Morning Report - Euro Dropped to Two-Years Low - 22 December 2014


Currencies

  • The euro (EUR) extended its drop to a new two-year low at 1.2219 against the US dollar (USD) on Friday on speculations that the Federal Reserve will increase their interest rates as early as in Q2. Today the European Consumer Confidence will be announced and is expected to be at -11.
  • The US dollar (USD) climbed to 119.61 on Friday against Japanese yen (JPY) as the Fed will probably hike their interest rates in the middle of next year. Today the US Existing Home Sales will be announced and are expecting to be at 5.21M.

Equities

  • US equities had the second biggest weekly gain this year as Fed will probably rise the interest rates in the middle of next year, while US economy expanded by 3.9% this year. The US 500 (SPI) climbed to 2075, the US 30 (DOW) advanced to 17841 and the US Tech (NDQ) went to 4288.

Commodities

  • WTI Crude (OIL) rebounded from 54.41 to 58.38 USD per barrel on Friday , as Saudi is confident that the demand for oil will rise, while some non-OPEC oil producers cut their output.

Mover & Shaker with forex options

  • The US dollar (USD) skyrocketed up to 0.9848 against the Swiss Franc (CHF) and recorded its 2 year high. The franc declined after the Swiss National Bank (SNB) imposed negative interest rates yesterday.
  • Option traders may consider buying a Call on USDCHF and gain if the pair continues the rally, while the risk is limited to the premium paid.

Written by Demetris Constantinou
Currency Strategist at easy-forex®