Gold as of this morning is around 1561.00 USD having traded lower the past two days. Going into the weekend it will be of interest to see if the precious metal continues to run into headwinds. The EUR has continued to trend higher since last week’s ECB monetary policy meeting. The Single Currency appears to have put the Cyprus crisis in its rearview mirror. What the EUR finds ahead on the bumpy road per the E.U. financial crisis is the larger question. Europe will release its Industrial Production figures shortly.
The U.S. will publish Retail Sales numbers later today and the outcome will be watched by investors even if they are seemingly mesmerized by the gains coming from the major equity indexes. The Dow Jones Industrial Index continued its upward march yesterday along with the S&P and NASDAQ. The Preliminary University of Michigan Consumer Sentiment reading will also be released today and coupled with the Retail Sales data will provide insight about the direction of the American economy. The USD continues to trade in a weaker mode against most of the major currencies except for the JPY.
Short-term plenty of risk taking is being seen in global equities however, commodities have not joined the party. Crude Oil has been range bound the past two trading sessions. Contrarian traders may find the gains in the equity markets of interest taking into consideration many analysts are questioning the foundations of the climb. Meaning that while many point fingers at the major stock indexes and shake their heads saying that the results should not be happening, in fact they are and a contrarian may have some further time to enjoy the party. JP Morgan Chase Inc. will be among many reporting quarterly earnings today.
The EUR continues to look over valued, but in the short-term without any changes apparently to come from across the Atlantic via the Federal Reserve, the Single Currency just may trade higher. And like a good telenovela do not expect the plot to change much in the coming months. The European economy is still within a massive recession (depression in some parts) and the problems within Spain, Italy, Portugal, and other nations are far from solved. However, just because we do not like the storyline surrounding the EUR doesn’t mean that it won’t lack for trading opportunities.
Fed policy from the States is definitely a factor in making the USD a weaker currency and President Obama’s Budget proposals for 2014 are not about to be accepted easily by the Republicans. With questionable fiscal policy from the U.S. government combined with the Fed’s monetary practice of quantitative easing, the argument can be made that on both sides of the Atlantic, that the Americans and Europeans are acting as if they have little regard about long-term implications. While both the States and E.U. keep their shoulders straight and smile for the cameras in an effort to save the day, people continue to worry about what is around the corner and what the value of their money will be in the years to come.