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*Good morning/afternoon everyone!*
There is very little consistency in the U.S. dollar’s performance this morning – the greenback is flat vs. the JPY, up vs. GBP and down vs. EUR and the commodity currencies. The initial uptick in U.S. yields suggests that we may not see additional weakness in the greenback until the ISM report but it remains under pressure for the time being. Although this may be a big week for the buck and today’s non-manufacturing ISM could be meaningful, last night’s Australian data and Reserve Bank rate decision along with Brexit talks had a greater impact on currency trade. While the EU says they are ready to restart talks, Britain is still dealing with their Irish border issue. The Australian dollar on the other hand experienced its strongest 1 day rise in more than a week thanks to stronger data and a less dovish RBA. NZD is in play this morning with a dairy auction on the calendar. The Bank of Canada meets tomorrow and with widespread improvements in Canadian data, we believe the loonie will trade higher ahead of the rate decision. Our strongest view is CAD strength and GBP weakness today.
*The MAIN THEMES I see today are*
+CAD, +CHF, +EUR
mildly +AUD (may be overextended today)
*Today’s Initial Trades*
1. sell AUDCAD at .9659, Stop at .9687, Target .9631
2. Buy CADJPY at 89.01, Stop at 88.73, Target 89.29
3. Sell GBPUSD at 1.3419, Stop at 1.3447, Target 1.3391
4. Sell USDCHF at .9843, Stop at .9871, Target .9815
Close ALL open day trades by 10:20AM NY / 15:20 GMT