Currencies
- The euro rose against the US dollar (USD) towards 1.3640, gaining in strength three days before the European Central Bank’s (ECB) Press Conference and the US Non-Farm Payrolls (NFP) release as Draghi’s might further unravel the ECB’s plans to ease Eurozone policy.
The dollar reached a six-week low against the yen. The yen climbed to its highest level this month as the tensions in Iraq and Ukraine as well as North Korea’s launching of missiles yesterday increased demand for safe haven assets. The pair is currently trading at 101.28 while today the monthly US Pending Home Sales may move the dollar.
Equities
India 50 rose in the morning towards 7621 even as other Asian markets remain downbeat. The nifty has been trending around all-time highs since the election of Narendra Modi as India’s premier.
Commodities
Wheat continues its bearish trend towards 590.38 USD cents per bushel as predictions for sufficient global supplies drove the largest fall in prices since 2011.
Mover & Shaker with FX Options
The British pound remains range bound around 1.7030 rear its 5-year high against the dollar. The Bank of England’s new measures over the housing market could further increase demand for pair, especially should the dollar continue its bearish trajectory.
- Option traders may consider constructing a Back Spread Strategy with Calls on the GBP/USD and gain if the pair moves higher, while the risk is limited to the premium paid.
- A Back Spread Strategy with Calls can be constructed by selling an at the money Call, while buying an out of the money Call at double the amount.
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