Market Commentary
USD rises to a 11-year high against all major currencies on
Tuesday, with the USD making a 6 week high against the
EUR as currency speculators favor the USD on widening interest rate differentials of U.S. Treasuries vs other major bonds. EUR/USD is now trading at its lowest since November 2003. The yield gap between the 2 year U.S. Treasuries and Euro zone
government bonds widened today ahead of the ECB unveiling of the estimated 1.1 trillion euro bond buy back program. EUR zone bonds thus effectively are pinned down according to Reuters release - http://www.reuters.com/article/2015/03/03/markets-bonds-euro-idUSL5N0W52CS20150303
Focus is now back on Euro zone economic weakness and debt and the possibilities of more price action towards the Dollar parity mark. The EUR fell today about 0.25 percent against the dollar to the $1.11545 region whilst the USDX rose in opposite direction to 95.57, its highest level since Sept. 2003. Crude oil cannot get any worse now as economic fundamentals play out. http://www.bloomberg.com/news/articles/2015-03-03/here-s-the-latest-sign-the-oil-price-plunge-is-hitting-the-job-market First the speculators plunge prices in the futures markets, then the oil companies have to sell their forward cargoes at what price the market has set, then companies have to lay off assets to reduce production costs and eventually production has to be curtailed for prices to establish a new benchmark trading range. There are no major spaces left for speculators to hit the oil market anymore. Bad news like Ukraione and war can temporarily push a market either way but fundamentally the oil industry has shaken of speculative pricing to forge a new price channel for the next 3 years to come in the 50-60 dollar range. Given this stability and low inflation in USA and Euro zone there is very little reason to hold the Gold asset at the moment.
US DX
95.367 -0.107 -0.14%
Support 94.919 Resistance 95.839
EUR
1.117700 -0.001670 -0.15%
Support 1.11357 Resistance 1.12597
Crude Oil
50.47 -0.05 -0.10%
Support 48.89 Resistance 51.65
Gold
1203.695 +3.585 +0.30%
Support 1,184.7 Resistance 1,224.3
Pieter Bergli - DeLoren Trust Holdings
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