Currencies

• The euro (EUR) dropped to a new 14-month low, from 1.2950 to 1.2880, against the US dollar (USD), despite the positive data from the German Trade Balance which were better than expected at 22.2 billion while expectations were at 17.3 billion. The pair still remains under pressure after the European Central Bank (ECB) cut the interest rates from 0.15% to 0.05% unexpectedly.
• The US dollar (USD) rose to its highest level since October 2008 earlier today against the Japanese yen (JPY) at 106.33. The greenback strengthened as investors speculate on improved figures of Unemployment Claims and Retail Sales that are due this week.

Equities

• US equities dropped yesterday. The US 500 (SPI) moved to 1997, the US 30 (DOW) went to 17074 and the US Tech (NDQ) to 4085.

Commodities

• WTI Crude (OIL) dropped to a 9-month low yesterday at 91.80 USD per barrel, before rebounding back to 92.80 due to low demand.

Mover & Shaker with forex options

• The British Pound (GBP) continued its bearish trend against the US dollar (USD) and is currently trading at its lowest point since November 2013 at 1.6077. Today the UK monthly Manufacturing Production will be released and it is expected to rise by 0.3%, while the governor of the Bank of England will be speaking in Liverpool about the UK economy’s future.
• 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 Puts while buying an out of the money Puts at double amount.

Written by George Constantinou
Currency Strategist at easy-forex®