By Yan Petters
It is now safe to say that the past month’s most lucrative investment has been crude oil. Traders that opened a long position for oil on February 16th bought it at around $85 a barrel. If they kept the position open, they can now sell it at over $106 a barrel, marking a 24% profit in merely three weeks.
The reasons for the massive bullish trend are widely known; first there is the unrest in the Middle East. The protest which was initiated in Tunisia continued to Egypt and eventually reached the oil producing nation of Libya. The fighting between the Libyan rebels and troops loyal to Muammar Qaddafi continues, and for now Libya has cut output by as much as 1 million barrels a day.
If this were not enough, U.S. employment reports released on Friday have shown that the labor market in the U.S. is finally recovering. The economy added 192,000 jobs last month, with 222,000 in job gains from private employers. In addition, the unemployment rate declined to 8.9 percent, the lowest since April 2009. The positive data has boosted speculation that demand for energy in the U.S. will increase as well, and thus providing another excuse for oil prices to soar.
Another “winner” of the recent events is gold. In times of uncertainty, gold is traditionally boosted as an alternative investment. Since January 28th gold climbed from $1,320 an ounce to its current price of around $1,435.
Here are today’s leading news events:
• 12:00 GMT, European Central Bank President Trichet Speaks – Trichet has already hinted last week that the ECB will hike interest rates in April. If Trichet once again refers to a rate hike, the market is likely to respond with higher demand for the euro.
• 13:30 GMT, Canadian Building Permits – This report measures the change in the total value of new building permits issued during January. If the end result will beat projections for a 1.8% increase, the CAD is likely to strengthen against its major currency rivals.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
