• English

Daily Report

Dollar Regains Control as Emerging Markets Struggle23 May 2018 by Dave Evans

Morning Report: 07.00 London

The US dollar is back in control as markets fret over emerging currencies and Trump’s mixed signals over China. The dollar index is on the rise this morning, forcing dollar pairs lower.

The Australian dollar has reversed course, with the AUD/USD one of the worst performing dollar pairs this morning. The AUD/JPY has hit a wall, with the pair reverting back from highs and continuing this morning. This comes amid renewed concerns over Trump’s approach to China.

The British pound showed some fight yesterday following better than expected public borrowing. However, these gains have been muted after Mark Carney presented mixed signals on the UK economy. The EUR/GBP is slightly lower again so far. The GBP/USD and EUR/USD are both challenging recent lows.

One currency making ground is the Swiss franc, as traders fret over the euro and Italian politics. The USD/CHF is slightly higher this morning after hefty losses yesterday.

Yen pairs are on the back foot, with the likes of the AUD/JPY and EUR/JPY extending yesterday’s slump. The USD/JPY is reversing for the second straight day.

Coming up today

This morning, we have various European manufacturing and services PMI data points. We start with French data at 08.00, German data at 08.30 and European data at 09.00.

RBA governor Lowe speaks at 09.00.

UK inflation comes under focus at 09.30, with CPI , RPI and PPI.

CPI realised sales are at 11.00.

US Crude oil inventories are at 15.30.

At 19.00, we get the release of the latest FOMC meeting minutes.

Trade Idea

Traders are piling into the Swiss franc at the moment as traders fret over Italy and any spillover from Turkey.

The EUR/CHF has been tumbling, but there could be more room for downside.

May 23rd, 2018: Dollar Regains Control as Emerging Markets Struggle

A good way to play this is a LOWER trade predicting that the EUR/CHF closes below 1.1600 in 14 days for a potential return of 192%.

May 23rd, 2018: Dollar Regains Control as Emerging Markets Struggle