Currencies
- The euro climbed last night against the US dollar after the FOMC statement. The single currency rose by 0.3% from 1.3544 to 1.3592 as the Federal Reserve disappointed investors who had expected tighter monetary policy and an early first increase in interest rates.
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The dollar fell yesterday against the yen towards 101.89. The Federal Reserve reduced, as expected, its monthly asset purchases from $45 billion to $35 billion even as the dollar slid 0.2% on yesterday’s news.
Equities
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US equities rose as the Fed supports low rates amid a slower recovery. The S&P 500 moved to 1949, the Dow 30 climbed to 16820 while the USTech (NDQ) advanced to 3797.
Commodities
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Wheat rose for a second day and is currently trading at 589.88 cents per bushel, as concerns about rain from Oklahoma to Kansas may delay harvesting in the US.
Mover & Shaker with FX Options
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Gold rose to 1277, near the highest level over three weeks, after the FOMC statement. Investors were not confident about Yellen’s economic growth expectations and that the interest rates will remain low, boosting the demand for the safe haven.
- Option traders may consider constructing a Back Spread with Calls Strategy on the XAU/USD and gain if the pair moves higher, while the risk is limited to the premium paid.
- A Back Spread with Calls Strategy can be constructed by selling an at the money Call, while buying a Call out of the money at double the amount.
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