Profit Taking Of USD Pushed By Yesterday’s ECB Comments

As concerns abound as to the speed of the stock market growth over the last three weeks, investors are playing it safe. We saw many indexes that reached their highest levels of 1, 2 and even three years. Many of these high priced indices were cashed in for large profits. Asian stocks continued to fall for the second day running in overnight trading.

ECB talk references to weak Australian data pushed the markets in Asian session. ECB member Jens Weidmann commented that there is little pressure on inflation across the eurozone. This provoked speculations that the Central Bank has some leg room, and may weaken the EUR by injecting cash into the economy.

Across the globe in Australia, data was released that home loans read -1.5 per cent for last month, which came after expectations of 0.6 per cent for February.

Stocks

Asian indices were reading broadly on the downside in afternoon Asian trading, as traders become wary over recent gains. The Hong Kong Hang Seng fell 1.6 per cent, ASX/S&P 200 closed 0.5 per cent down and the Nikkei 225 in Japan finished 0.6per cent lower.

Close of US trading yesterday, the DJIA crept to close at another fresh record high. The Dow was boosted on optimistic US market sentiment. By the end of US trading session, the Dow Jones closed up 0.02per cent, S&P 500 finished down 0.24 per cent and the NASDAQ down 0.32 per cent.

Little movement in European stocks yesterday, as investors remain wary after Monday's negative eurozone reports. The EURO STOXX 50 closed down 0.21 per cent on the day, French CAC 40 sloped 0.2 per cent and the German DAX 30 ended 0.09 per cent down.

Forex

The greenback lost its role as safe haven in Asian trading, dropping against most of the majors. This was partly down to profit taking of the USD pushed by ECB comments yesterday. The USD came off of a yearly high. The USD lost 0.56 per cent against the Yen to trade at 95.45, the lowest level for the pair since Mar 8. The USD lost 0.34 per cent against the GBP which took another beating yesterday after disappointing data. The JPY was higher against the EUR, with the pair shedding 0.34 per cent to hit 124.77.

The AUD was reasonably unmoved against the USD today, valued at a 2 ½ week high. The AUD/USD touched a high of 1.0333 in late Asian trading.

Commodities

Crude oil was trading higher overnight, fueled by the weakening USD. Data release from OPEC showed an unchanged global demand. The commodity gained 0.43 per cent to touch a two-week high. Meanwhile Natural gas rallied after two weeks of highs from warming weather reports in the US and Europe. Little movement in the precious metals.

Binary Options Analysis Today’s Fundamentals

Later today, Italy will be holding a bond auction. It will be a good test of investor warmth towards the country’s debt and will affect the EUR. The US will release retail sales data later today. Positive data will reinforce sentiment of economic growth also indicated by the positive employment figures from last week. This will be sure to cause the USD to react today. Look out for French and Spanish CPI data releases.