Currencies
- The euro retraced from its high at 1.3878 all the way down to 1.3800 against the US dollar. The single currency lost previous gains after the German inflation remained below ECB’s target adding pressure to the ECB for additional easing.
The US dollar hit its three week high at 102.77 before its drop back to 102.31 against the Japanese yen. The yen gained only 40 pips after the Bank of Japan refrained from adding more stimulus. Looking on the calendar the US ADP Non-Farm Payrolls due at 12:15 GMT may shake the pair as expectations show of additional 203K jobs during the last month.
Equities
The US stocks continue their rally, with the US 30 (DOW) reached its high at 16491 and the US 500 (SPI) rose up to 1874.
Commodities
WTI Crude Oil climbed up to 102.19 before retracing back to 100.34 US dollars per barrel. The energy trades near its monthly low on speculation that crude stockpiles expanded during the last week. Crude Oil Inventories due at 14:30 GMT with expectation of 1.3 million barrels held in inventory.
Mover & Shaker with FX Options
The US dollar collapsed by almost 100 pips and slid down to 1.0942 against the Canadian dollar. The loonie gained ground ahead of country’s monthly GDP release due at 12:30 GMT with forecasts at 0.2%.
- Volatility rises ahead of the FOMC statement, thus options traders may consider constructing a Long straddle on USDCAD and benefit from possible sharp moves in either direction.
- A long straddle can be constructed by purchasing an at-the-money Call and an out-of-the-money Put.
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