*Good morning/afternoon everyone!*

The U.S. dollar is extending its gains following yesterday’s hawkish comments from Fed Chair Powell. On Day 2 of his Congressional testimony, investors expect the same sense of optimism. USD/JPY is hovering just under 113 and while another probe above that level seems imminent, we don’t expect a material extension as the second day of his semi-annual testimony is rarely as market moving as the first. However the Beige Book, scheduled for release in the afternoon should reinforce the dollar’s positive bias. Sterling is under the greatest pressure as inflation growth slows on a consumer and producer level. CPI also fell in the Eurozone causing EURUSD to eye a break of 1.16 and GBP/USD teasing a move below 1.30. With oil prices falling further this morning, USD/CAD will try to break 1.3250. Commodity currencies in general are under pressure and we expect this same underperformance today.

*The MAIN THEMES I see today are*

-EUR
-GBP
+USD
-NZD
-CAD

*Trading Biases*

+USD
-EUR, -GBP, -NZD, -CAD, -AUD, -JPY
Neutral CHF

*Today’s Initial Trades*

Here’s the summary –

1. Short EURJPY at 131.26, stop at 131.54, Target 130.98
2. Buy NZDCAD at 8955, Stop at .8927, Target .8983
3. Buy EURGBP at .8912, Stop at .8884, Target .8940
4. Sell NZDUSD at .6757, Stop at .6785, Target .6729

Close ALL open day trades by 10:20AM NY / 15:20 GMT