USD Trading Outlook (07-03-2013)

The euro (EUR) gained ground against the US dollar (USD) currently moving above 1.3028. The single currency had previously reached a six month low after Italian election results did not show a clear winner making negotiations for forming a strong government difficult. Yesterday’s Eurogroup meeting brought the Cyprus bailout one step closer to resolution, however the European economy still looks fragile and any growth may prove anemic.

• WTI Crude (OIL) dropped to 89.45 before rebounding to 90.41 following worse than expected Chinese growth forecasts.
• The US 500 (SPI), which tracks the top 500 US corporations, gained as investors switch from riskier bonds to US equities
• Weekly option volatilities for the EURUSD dropped from 11.15 to 10.00 as investors return to riskier returns and option premiums fall.

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