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*Good morning/afternoon everyone!*
The U.S. dollar is trading higher against all of the major currencies this morning despite a marginal pullback in U.S. yields. The commodity currencies are the worst performers with CAD extending its slide following yesterday’s Bank of Canada statement. The Australian dollar has slipped on the back of softer trade data. Sterling is the most resilient as investors hope for a Brexit deal. Time is running out for Prime Minister May and the pressure is on for the leader of the UK to strike a deal with the DUP and the EU. With the EU Summit slated for next week, it’s head Brexit negotiator has given Britain 48 hours to agree to a potential deal or risk freezing the talks for the rest of the year. Sterling bulls are optimistic and while we are skeptical of a deal, we see the possibility of GBP recovery today before some selling on Friday. As non-farm payrolls near, USD/JPY comes into play. The pair has found its way back above 112.50 but 113 remains formidable resistance. Jobless claims and the Challenger layoff report are due this morning and while these numbers may only have a limited impact on the greenback, jobs are on everyone’s minds. We expect the dollar to press higher today as other currencies underperform.
*The MAIN THEMES I see today are*
-EUR, -CHF, -AUD, -NZD, -JPY
neutral CAD (fundamentally positive but meeting resistance technically)
*Today’s Initial Trades*
1. Buy EURJPY at market now 132.84, Stop at 132.56, Target 133.12
2. Sell AUDCAD at .9649, Stop at .9677, Target .9621
3. Bought USDJPY at 112.74, Stop 112.47, Target 113.02
Close ALL open day trades by 10:20AM NY / 15:20 GMT