Gold Surges on the Weaker Greenback

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Gold Surges on the Weaker Greenback

Dollar

There is little demand for the dollar today on the ongoing debate over the concerns of the federal budget balance. The GBP/USD pair is up 0.09 percent at $1.5885. The USD/CAD has slumped 0.08 percent to 1.0012 Canadian cents. The USD/CHF is lower by 0.12 percent at 0.9462 Swiss francs. There is very little demand for the dollar today, as it has been somewhat overvalued recently. Traders have decided to put their money in riskier currencies, as they view these as offering the desirable returns.

 

Euro

The European single currency is highly popular this Wednesday morning. There is much bullishness with the euro today due to the forecast that Greece will be successful in securing a third bailout in the past few years. The EUR/USD pair has made gains of 0.13 percent to the $1.2721 level. The EUR/GBP cross has advanced 0.04 percent to 80.08 pence. Further gains may be on the cards for the euro today.

 

Yen

The yen is one of the weakest currencies today, as there is a lack of demand for safe-havens. Investors have decided to drop haven currencies for risker ones. As a result, one of the biggest losers have been the yen. The USD/JPY pair is higher this Wednesday by 0.13 percent at 79.48 yen. Positive news today could lead to further declines for the JPY.

 

Stocks

European stocks made gains yesterday on the forecast that the Spanish government will ask for a bailout in the near future. The Stoxx Europe 600 Index climbed 0.4 percent to 270.6. Germany’s DAX Index rose by less than 0.1 percent. France’s CAC 40 advanced 0.6 percent. The U.K.’s FTSE 100 rose 0.3 percent. UniCredit SpA jumped 4.4 percent to 3.52 euros. ITV Plc. climbed 12 percent to 14.64 euros. Vodafone tumbled 2.5 percent to 162.5 pence.

 

Crude Oil

Crude oil is trading higher this Wednesday morning by 6 cents at the $85.90 level. This is after it fell for two straight trading days. The energy is being driven higher by a number of factors today. The greenback has lost a lot of value in recent trading, which has been pivotal in driving oil prices higher. The latest gains come despite the forecast that stockpiles in the U.S. rose by 2.5 million barrels to the highest rate since July. The fact of the matter is that there is a lot of risk appetite in the financial markets. Therefore, one of the biggest gainers have been oil, as it has been undervalued lately.

Gold

There is much higher demand for gold this morning on the weaker dollar and on the increased likelihood that Greece will secure stimulus. The price of gold is higher by $3.55 at $1,728.35. Traders have been attracted to the precious metal as analysts forecast it to rise to the $2,000 level in the coming months. However, the likelihood of this actually occurring is not secure. Gold futures could rise further if the USD slumps.