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Dollar Drops Back as Risk Taking Demand Increases29 March 2019 by Dave Evans

Morning Report: 07.00 London

The dollar index is tucking back this morning after hitting their highest levels of the week last night. This comes as China trade talks advance and despite US GDP coming in below expectations.

The AUD/USD is leading the charge after holding support around 0.7080. The GBP/USD is holding ground after further selling yesterday ahead of May’s ‘day of reckoning’ with parliament voting on the withdrawal aspect of the Brexit deal. Hopes are not high, which is reflected in the GBP/USD dropping to 1.3050 yesterday. This level is holding for now.

The EUR/USD is struggling though, with small gains after selling in five of the last six sessions. The EUR/GBP is on the back foot as the pair remains rangebound.

The USD/CAD remains within sights of the March highs. The USD/CHF is bucking the general dollar weakness to climb further towards the 1.0000 this morning.

The USD/JPY is on the rise as safe have demand ebbs and the yen slips back as a result. The AUD/JPY is pushing higher for the second day in a row. The EUR/JPY is making gains, but lagging as support holds around 124.00. After falling to test 144.00 yesterday, the GBP/JPY is making small gains this morning.

Meanwhile, gold is lower again after significant losses yesterday.

Coming up today

Today, we have UK current account at 09.30, released alongside GDP and net lending to individuals.

US personal spending and core CPE price index are at 12.30. Also at this time are Canadian GDP and RMPI.

US Chicago PMI is at 13.45, with revised UoM consumer sentiment at 14.00.

FOMC member Quarles speaks at 16.00.

Trade Idea

Focus has been on the pound’s woes of late, but pressure is building on the euro, with fears of Turkish contagion and European political unrest.

Dollar Drops Back as Risk Taking Demand Increases

A good way to play this is a LOWER trade predicting that the EUR/USD will close below 1.1200 in 14 days for a potential return of 154%.

Dollar Drops Back as Risk Taking Demand Increases