More downside pressure for markets
Yesterday saw some volatile trading following the European election results that saw voters rebel against austerity measures and vote in parties promising to rein such activities in. There was an initial violent reaction when markets opened on Monday, but this initial slump was steadily reversed throughout the day. This morning, markets are once again under pressure, though are some way off the extreme lows of Monday.
The US dollar index gapped higher yesterday, but fell below Friday´s close by the end of the day. This morning´s rise implies a renewed pressure on ´risk on´ assets, though not on the same scale as Monday´s shock.
The euro is also above Monday´s lows, but is still considerably weak on a relative basis. The EUR/USD is still well below Monday´s gap lower, while the EUR/GBP continues to trade lower.
Other currencies under pressure include the Australian and New Zealand dollars, which are down after Australian trade balance figures came in worse than expected -1.59bn. The NZD/USD is the morning´s top faller, down 0.38%.
Coming up today we have the Australian annual budget release at 10.30. German industrial production figures are out at 11.00.
Last week saw the biggest weekly gain for the USD/CAD since December, bringing the pair once again within the boundaries of the zone between 1.0000 and 0.9850. After large moves, there is a bias for a reversal in the opposite direction for these closely related currencies.
A good way to play this situation might be a LOWER trade on BetOnMarkets.com predicting that the USD/CAD closes below 0.9900 in 7 days time for a potential return of 171%.
Get this trade now, go to: http://goo.gl/c4vLu
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