Dollar Jittery Ahead Of FOMC Statement Tomorrow

Frankfurt (Mar 18)  The euro (EUR) continues to strengthen having reached 1.3946 before correcting to 1.3927 against the US dollar (USD) this morning. The single currency may be tested this morning as Germany releases the ZEW economic sentiment, a key indicator of European economic activity.

The US dollar (USD) regained against the Japanese yen (JPY) aiming at 101.93 last night. The dollar had come under pressure over last week but is now regaining momentum across the board. Look ahead this afternoon for Long-term-Purchases indicating an inflow or outflow of investments from the United States.

Equities

British stocks made their first correction after days of decline amid high risk aversion from investors. The UK 100 (FTS) index recorded a rise to 6582 from a low of 6499 last Friday.

Commodities

Brent Crude (BRT) prices follow the general trend of energy prices edging lower. The crude oil touched a low of 106.10 dollars per barrel from 108 dollars on Friday as Crimean tensions ease.

Mover & Shaker with FX Options

Gold (XAU) edged lower yesterday as tensions over Ukraine eased and funds rushed into riskier assets. The precious metal moved to 1358 before correcting to 1360 in early trading. Options traders may consider constructing a long straddle on Gold.

A long straddle can be constructed by purchasing an at-the-money Call and selling an at-the-money Put.

Source:  ActionForex