Currencies

• The euro (EUR) remains range bound against the US dollar (USD) at 1.3363. The single currency rose to 1.3414 after bad US Core Retail Sales data, which were the worst in the last six months, before it retraced back to 1.3363. The single currency is under pressure as the quarterly German Preliminary GDP will be announced today and is expected to be at -0.1%.
• The US dollar (USD) continues its bullish trend for a fourth consecutive day against the Japanese yen (JPY) at 102.58 as earlier today the quarterly Japanese Core Machinery Orders rose by 8.8%, while the expected increase were at 15.5%. The yen is still under pressure as the US Unemployment Claims will be announced today and are expected to be at 307K.

Equities

• European equities rose yesterday. The Germany 30 (DAX) advanced to 9195, the EU Stocks 50 (ESX) went to 3051 and the France 40 (CAC) to 4188.

Commodities

• Corn (CRN) fell to 355 USD cents per bushel as weather forecasts in US expect adequate rain conditions with supply possibly rising to a record.

Mover & Shaker with forex options

• The British Pound (GBP) dropped to a fourth month low at 1.6669 against the USD dollar (USD) yesterday as the Governor of Bank of England (BoE) said that the increase in interest rates might delay as the UK wages growth halved, despite the fall in unemployment rate which was at 6.4%.
• Option traders may consider constructing a Back Spread Strategy with Puts on the GBPUSD and gain if the pair moves lower, while the risk is limited to the premium paid.
• A Back Spread Strategy with Puts can be constructed by selling an at the money Put while buying an out of the money Put at double amount.

Written by Demetris Constantinou
Currency Strategist at easy-forex®