Can a Currency Be Too Strong?
Euro Currency: December Euro Currency futures fell to 3-week lows in early trade, as European finance ministers attempt to talk down the Euro out of concerns that the currency has gotten too strong against the Dollar and the Japanese Yen. This has caused speculators long the Euro to start booking some profits. In early trade, December Euro Currency futures are trading at 1.4052, down 0.0106.
Cocoa: New York Cocoa prices are supportive this morning, defying bearish fundamentals of a rise in Ghana’s Cocoa production forecast and a sharply higher U.S. Dollar against the British Pound. In addition, the Cocoa harvest in the Ivory Coast has begun, which may spur some origin hedge selling on any rally attempts. In early trade, December Cocoa was trading at $1835, up $19.
Crude Oil: The sell-off continues in the Crude Oil market, as traders expect a build of U.S. Oil inventories last week. According to a Bloomberg survey of analysts, U.S. Oil stock rose by 1.5 million barrels last week, as refinery usage declined due to seasonal maintenance. As a reminder, this week’s EIA energy stocks report will be out on Thursday at 9:30 AM – instead of Wednesday – due to the Columbus Day holiday on Monday. In early trade, November Crude Oil is trading at $78.57, down $0.59.
Mike Zarembski, Senior Commodity Analyst
