Financial Spread Betting Update 23rd May 2011

This week’s financial spread betting update is now available and can be read by clicking here.

As we wrote in this week’s update, the dollar is obviously a big driver behind commodities and stocks and uncertainty in the dollar is currently impacting other markets. As a general rule, commodities and to a lesser extent stock indexes have an inverse relationship with the dollar, so as the dollar rises, stocks and commodities generally fall and vice versa.

In this morning’s trading, the dollar is higher and stocks are lower. Most commodities are also lower, some sharply so. Trading this morning is seeing a return to “risk off” over “risk on” and is benefiting the Treasury markets. We are also seeing a move out of the riskier currencies and this has led to a move higher for the dollar index, easily clearing the 7600 level. If the dollar can continue to advance then we will likely see further weakness for commodities and stocks.

This week’s financial spread betting update begins with:

The dollar’s recent short-term strength initially continued this past week but then ran out of steam. The long-term momentum is still very much against the dollar and even in spite of the recent dollar rally the value of the net short position against the dollar is still $20.01 billion according to Reuters and the CFTC..…continue reading by clicking here

Good trading

Phil Seaton

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