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*Good morning/afternoon everyone!*
While the U.S. dollar is trading higher against most of the major currencies this morning, the moves are relatively modest. Equities have stopped falling and yields are flat but after yesterday’s high anxiety trade, it is still too early to tell if this is the eye of the hurricane or the calm after the storm. The trade war is brewing strong with political risks continuing to haunt currencies. The worst performing currency today is the Swiss Franc followed by the euro and New Zealand dollar. There’s no news for Switzerland but jawboning by ECB member Nowotny who said he sees the euro falling against the dollar is hurting the currency. The EU also announced plans to impose 2.8 billion euros worth of tariffs on US imports on Friday. NZD on the other hand is pressured by softer consumer confidence and yesterday’s drop in dairy prices. GBP/USD fell to a fresh 7 month low ahead of a second Brexit vote, this time by the House of Commons on whether Parliament has a final say on the Brexit deal. The vote is expected around 18:30 GMT. While the U.S. releases existing home sales and its current account balance later this morning, the main focus will be on ECB President Draghi, Fed Chair Powell and BoJ Governor Kuroda’s comments in Sintra around 13:30 GMT. There’s also a number of OPEC headlines that could affect how the loonie trades. USD/CAD raced above 1.33 this morning and is still trying to figure out whether it has the strength to take out another big figure.
*The MAIN THEMES I see today are*
-EUR, -GBP, -NZD, -CHF, -AUD, CAD
*Today’s Initial Trades*
Here’s the summary –
1. Sell AUDUSD at .7388, Stop at .7416, Target .7360
2. Sell EURUSD at 1.1563, Stop at 1.1591, Target 1.1535
3. Buy AUDNZD at 1.0735, Stop at 1.0707, Target 1.0763
4. Sell CHFJPY at 110.32, Stop at 110.60, Target 110.04
Close ALL open day trades by 10:20AM NY / 15:20 GMT