Currencies
- The euro (EUR) continues to move lower ahead of today’s German IFOBusiness climate report. The single currency has moved from 1.3721 to 1.3645 overnight.
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The US dollar (USD) strengthened against the Japanese yen (JPY) moving above 101.73 in early trading. The greenback is moving on the back of investor expectation for a US reduction to monetary accommodation, after a year of stronger economic data coming from the states. Markets are eager for this afternoon’s US new home sales, a key figure of economic activity.
Equities
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Investors continue their keen interest on US equities even as they slide lower. The US 500 (SPI) moved to 1887, the US 30 (DOW) to 16536 while the US Tech Index (NDQ) is at 3640 points.
Commodities
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Cocoa (CCO) prices continued to rise over may from a low of 2874 to 3007 dollars per metric tonne as global demand picks up. Asia is seen as the main culprit as demand from China and other emerging markets for chocolate has pushed demand upwards with supply late to catch up.
Mover & Shaker with FX Options
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The US dollar (USD) is however moving lower against a stronger Canadian dollar (CAD). The looney is moving higher ahead of today’s Canadian consumer price index data coming out this afternoon and is expected to rise by 0.2%. The pair is trading just below 1.0895.
- Option traders may consider constructing a Bear Put Spread strategy on the USD/CAD and gain if the pair moves lower with limited risk to the premium paid.
A Bear Put Spread can be constructed by purchasing an at -the-money Put and selling an out-of-the-money Put.
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