The dollar is trading mixed this morning, as there is a limited degree of risk appetite in the markets. The GBP/USD pair has slumped 0.02 percent to $1.6031. The USD/CHF has fallen 0.05 percent to 0.9362 Swiss francs. The AUD/USD pair has climbed 0.07 percent to the $1.0338 level. The news of Hurricane Sandy is on traders’ minds at the moment, which may lead to unforeseen volatility in the forex market today.
The euro did lose ground versus its main peers yesterday, but the currency is trading higher this morning. The EUR/USD pair has advanced 0.04 percent to $1.2910. There is a return of confidence in the European single currency this morning after there has been a lot of instability in recent trading days. The gains today come despite the forecast of further negative data from the Eurozone. The euro may climb further later today.
The yen was much stronger in early trading on Monday, but has since lost value versus its main peers. The USD/JPY pair has climbed this morning by 0.04 percent to the 79.83 yen level. Traders have lost confidence in the yen at least temporarily due to the return of limited risk in the markets. The USD/JPY pair is expected to make further gains, as the trading day unfolds.
Crude made heavy gains yesterday, which was predicted in the Daily Analysis of 29102012 that said “Oil may fall further in the next few hours.” Crude oil prices have been very bearish lately, as there is a lot of instability in the financial markets. The Eurozone is expected to publish more weak economic data in the coming hours, which has already been priced into crude oil. Prices are lower this Tuesday morning by 0.31 percent at $85.28. Traders just do not have the confidence to buy into crude oil at the moment, as there is a lot of instability in the markets. Hurricane Sandy is putting downward pressure on crude as of late. Do not be surprised if there are further losses in the hours ahead.
Gold is another commodity that has been trading negatively in recent trading sessions. The weakness has continued due to a stronger dollar and the slowing global economy. There are fears that imports from the leading countries will continue to fall in the months ahead. This therefore explains why prices are so weak at the moment. Prices are higher this morning by a dollar at $1,709.70. Further losses may be on the cards later on this Tuesday.