The dollar is trading higher on all fronts this morning. This is largely due to the bearish Asian stocks in early morning trading. The reality is that the riskier currencies were much stronger last week. However, they did start to show signs of weakness on Friday. When looking at the greenback, it has been very much undervalued lately. Therefore, traders are only more than happy to put their money into the U.S. currency. The GBP/USD is weaker this morning by 30 pips at $1.6040. The AUD/USD has slumped 2 pips to $1.0479. The USD/CHF is higher as of now by 31 pips at 0.9278 Swiss francs.
The euro has lost a lot of ground this morning, as the demand for risky currencies is very low. Traders just do not have the confidence today to invest in currencies which are deemed by many to be overvalued. That is why the EUR is so bearish. The EUR/USD pair has tumbled by 43 pips to $1.3026. There is just not the confidence in the European single currency today, which has led it to lose value against the pound sterling. The EUR/GBP cross is lower this Monday morning by 10 pips at 81.21 pence.
The yen is in very high demand today after it fell a lot in the past several trading weeks. It is true that the Bank of Japan has decided to go ahead with a lot of stimulus for the nation’s economy. However, the yen seems to have gained today on its safe-haven status. Therefore, traders should have in mind that underestimating the JPY’s strength is a very big mistake. This is especially so, as there is so much bearish sentiment in the markets right now. The USD/JPY pair is much lower today by 51 pips at 87.64 yen.
Last week saw a lot of bullishness when speaking of the leading stocks and indices on Wall Street. This was all topped off on Friday with an impressive rally. This was the perfect way to start the New Year, as there has been a lot of instability in the financial markets recently.
The Dow Jones Industrial Average added 0.33% to 13,435.21. The Nasdaq Composite index gained 0.04% to 3,101.66. The S&P 500 jumped an impressive 0.49% to 1,466.47.
Citigroup gained 2.51% to $42.43. Morgan Stanley rose 3.12% to $20.19. Nokia added 0.48% to $4.18. Pfizer climbed 0.43% to $25.96.
Traders should make sure that they stay ahead of the latest market developments today if they intend in opening positions in the leading stocks on Wall Street once the U.S. market opens.
Crude oil futures made very important gains in the previous trading week. This was despite their being a lot of turmoil in the financial markets. There were many factors which helped drive oil prices higher. Crude oil inventories dipped, which was a critical factor in boosting crude. In addition, when looking at last week as a whole, the dollar was much weaker. Therefore, this was also a key reason for the bullish oil prices. Crude oil futures have slumped this Monday morning by 42 cents to $92.67. Traders have decided to sell the black gold on the weak market sentiment arising from the stock market slump in Asia this morning. Investors will be looking for good news from the U.S. to push oil prices higher later today.