The United States currency, surged cross the 90 yen barrier on Thursdaas it took out one of the key most important option barriers and went on to hit off a two and a half year peak value against its Japanese counterpart, the yen.
The greenback was seen posting a high of 90.10 yen which is the strongest level reached since June, two years back. The USD had been trading last at 89.95 yen before it went up by almost two percent during the last trading session.
All of the crosses of the Japanese currency hit the peak in the session as the euro also rose against it, rising to 120.57, its highest since May, 2011. The euro was last seen trading against the yen at 120.36 before it went up by two and a half percent in the session.
Gains for the euro, despite weak economic data from the US
The US dollar went down against the euro in the last trading session despite reports being more or less encouraging on the housing front while the euro’s Japanese counterpart reached a new low amidst speculation of another round of easing. The euro was seen rallying till 1.3376 as the European Union President Herman Van Rompuy stirred hopes of traders to see the Euro zone back in growth mode by 2013. However, optimism was met midway with a pessimistic mood the debt crisis continues and the currency may fail to materialize in the dragging economies of the bloc.
The euro stood at $1.3375 compared to its previous value of $1.3286 at 22:00 GMT by late Wednesday.
Yen on a two year low!
The Japanese yen plunged downwards to an unexpected two and a half year low against its US counterpart as it took out one of the key barrier levels possibly because of the steps taken by the Japanese authorities to resurrect the country’s economy. Evidently it was the dollar and the euro that gained heavily against the yen after constantly sinking for 2 sessions in a row. According to sources, the Bank of Japan will be considering by next week the removal of the 0.1 percent floor of the interest rates in the short term and let the two percent inflation target be reached by promoting asset buying in the market. Experts are of the opinion that it is presently difficult to choose between the dollar and the yen given their rate of appreciation.
However, there would probably be a head and shoulders pattern around the key 92-93 mark.
Crude Options plunge as Futures gain
The volatility in the oil options slipped as the optimism in the US market was bolstered given the rise seen in the data on housing and jobless claims being reported. The implied volatility which is a measure of the expected swinging in the price levels and used in measurement of the option prices was at 20.83% on the New York Mercantile Exchange as compared to its previous value of 22.1%.
The Price of crude oil advanced to $95.49 for every barrel on the Nymex, up by $1.25.
Improved housing, jobless reports boost stocks
US Stocks advanced as the S&P 500 was pushed on to another 5 year high after visibly strong reports were delivered on the housing stats and the number of unemployment claims by seemed much more optimistic than before.
Over all the Standard and Poor’s 500 took a rise of eleven points to 1483 which is its highest level since December 2007!
The Dow Jones also rose, as it gained 110 points at 13621. NASDAQ composite rose to 3142 by 24 points.