Gold and silver have gotten destroyed along with the bond market. AUG13 gold is down a whopping $77 to $1,297. The currencies are having a big day as well with the Aussie is getting crushed, trading down 163 ticks to 91.18.
With recent events how can a trader position themselves to take advantage of a falling Australian dollar? Options provide leverage while still allowing a trader to set up a well-defined risk vs. reward setup.
First, the Aussie Central Bank cut interest rates, which has sparked Aussie dollar selling. Second, rumors of legendary trader George Soros taking a big short position in this currency also probably stoked some added selling as well.
The yen gained versus the dollar, erasing yesterday’s loss, amid speculation a decision tomorrow by the Bank of Japan will signal its monetary-easing efforts will fall short of its goals and fail to reignite inflation.
The euro touched the lowest level against the dollar in more than a month after the European Central Bank said financial institutions will repay less of its three-year loans next week than economists forecast.