The dollar index is back in demand as global confidence fades and traders seek out the safety net of the US dollar.
The dollar’s strength is being helped by the weakness in its main counterparty the euro. The EUR/USD dropped for the second straight day as the ECB issued a cautious briefing on the state of the economy. The EUR/GBP is back on the rise this morning though as the pound remains pressured.
The GBP/USD is slipping back this morning on reports that Theresa May would not receive any amendments to her Brexit plan. It remains to be seen if May managed to secure ‘clarifications’ on issues such as the Irish Backstop.
The USD/CAD is back on the rise and eyeing a return to the highs above 1.3400.
The USD/CHF is also making gains though remains between the 1.0000 and 0.9900 range following yesterdays neutral SNB meeting.
Yen pairs are mixed, with the USD/JPY making slight gains, while the likes of the AUD/JPY is suffering heavy falls. The GBP/JPY and EUR/JPY are erasing most or all of yesterday’s gains.
Today we have Flash Manufacturing PMI and Services PMI data from France at 08.15. We have corresponding German data at 08.30 and European data at 09.00.
US retail sales are at 13.30.
While the focus has been on the pound’s woes, the euro still has its own worries as the ECB struck a cautious tone.
<a href=”%LINK%%?currency=GBP&market=forex&underlying=frxEURUSD&formname=higherlower&duration_amount=14&duration_units=d&amount=10&amount_type=stake&expiry_type=duration&barrier=1.1300” target=”_blank” rel=”noopener noreferrer nofollow”“>Further downside could be on the cards as dollar interest increases. A good way to play this is a LOWER trade predicting that the EUR/USD will close below 1.1300 in 14 days for a potential return of 167%.</a>