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Feb 9th, 2018: Dollar Recovers after Latest Market Slump

Morning Report: 07.00 London

This morning, the dollar index is recovering after the latest bout of volatility which saw the Dow Jones lose more than 1000 points. The dollar made small losses, with gains made this morning. Generally, currency markets have avoided the worst of stock market volatility.

The AUD/USD has continued its losing run, by contrast, the GBP/USD is set for its second straight day of gains, while the EUR/USD is keeping its head above water.

The yen pairs have seen the worst of recent volatility, with the yen in demand and driving the USD/JPY lower, while the US dollar is finding willing buyers as traders bet on higher inflation and interest rates. The USD/JPY is lifting off the lows, with the 108.50 level acting as support. The AUD/JPY is following suit, falling heavily yesterday but recovering well off the 84.50 level this morning.

The GBP/JPY has seen the shallowest falls, keeping some way above the 2018 lows, while the EUR/JPY is recovering after slipping below the lows yesterday. It has been advantage pound this morning as the EUR/JPY trades lower on the week.

Gold has continued to come off the highs, while the USD/CHF acted as a safe haven yesterday, trading lower again.

Coming up today

Coming up today, we have UK manufacturing production at 09.30, released alongside goods trade balance and NIESR GDP estimate.

At 13.30, we get Canadian employment change and the unemployment rate.

MPC member Cunliffe speaks at 16.45.

Trade Idea

The Swiss Franc has emerged well from this mini crisis as traders seek out safe havens during the volatility. As such the EUR/CHF has reverse from the highs recently.

Feb 9th, 2018: Dollar Recovers after Latest Market Slump

We could see further reversals from here and a good way to play this is a LOWER trade predicting that the EUR/CHF closes below 1.1400 in 14 days for a potential return of 193%.

Feb 9th, 2018: Dollar Recovers after Latest Market Slump