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Dollar Rallies on Fed Minutes18 October 2018 by Dave Evans

Morning Report: 07.00 London

The US dollar is holding on to yesterday’s gains as markets continued to bet on higher rate levels for the US dollar. Yesterday’s Federal reserve meeting keep up the rate hike momentum, with the FOMC apparently prepared to defy Trump.

The EUR/USD reversed heavily yesterday and is slipping below 1.1500 this morning. The GBP/USD also reversed all of the week’s earlier gains, with follow on selling this morning. This comes after below par inflation, with CPI coming in at just 2.4%.

The USD/CAD made large gains yesterday, reversing the previous four days of losses. This comes as oil prices reversed heavily yesterday.

Meanwhile, the Swiss continues to weaken, with the USD/CHF pushing the 0.9950 level.

The AUD/USD is the main exception, with the Aussie reversing on better than expected unemployment rate data in the early hours of this morning.

The yen pairs are on the back foot this morning, including the USD/JPY which has pulled back half of yesterday’s gains. Meanwhile, the EUR/JPY and GBP/JPY are testing support with follow on losses. The AUD/JPY is a positive exception however.

Coming up today

Today we have UK retail sales at 09.30.

Philly Fed Manufacturing Index is at 13.30.

We also have day two of the EU Economic Summit.

Trade Idea

The euro is weaker this morning, while the yen recovers. The euro area continues to faces risk factors including Italy and Turkey, while the yen recovers its poise.

October 18th 2018: Dollar Rallies on Fed Minutes

A good way to play this is a LOWER trade predicting that the EUR/JPY will close below 129.00 in 14 days for a potential return of 127%.

October 18th 2018: Dollar Rallies on Fed Minutes