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Dollar Dips On Divided Washington07 November 2018 by Dave Evans

Morning Report: 07.00 London

The US dollar index is on the back foot after US mid-term elections saw Democrats take the House, while Republicans took the Senate. It’s been a volatile 24 hours for the Greenback, but the US dollar index is currently posting small losses after selling off yesterday.

Dollar pairs are holding volatile gains, building on the advances from earlier in the week. The AUD/USD continues to lift off the lows, as is the EUR/USD and GBP/USD.

Sterling continues to out-perform, holding the 1.3100 level. Meanwhile the pound is keeping the upper hand against the euro, holding at the lows below 0.8750.

Reverse dollar pairs are mixed, with the USD/CHF slipping below parity briefly, but holding for now.

By contrast the USD/CAD has risen for the fourth straight day as oil prices erase all of the September rally.

The yen pairs are on the back foot, with the dollar losing ground to the yen in volatile trading. The AUD/JPY has also halted its nascent rally off the October lows. The GBP/JPY and EUR/JPY have also reversed for the first time in November.

Coming up today

Today we have SNB governing board member Zurbrugg speaking at 14.00.

Canadian Ivey PMI is at 15.00, with US crude oil inventories at 15.30.

The New Zealand cash rate and monetary policy is at 20.00.

Trade Idea

The EUR/USD has recovered off the lows this morning, but the recovery has been tentative, with volatile trading so far this morning.

Nov 7th 2018: Dollar Dips On Divided Washington

The lows are still an attractive target, making a LOWER trade attractive. A good way to play this is a LOWER trade predicting that the EUR/USD will close below 1.1400 in 14 days for a potential return of 145%.

Nov 7th 2018: Dollar Dips On Divided Washington