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Jan 26th, 2018: Dollar Slips Back After Trump Comments

Morning Report: 07.00 London

This morning, the US dollar index is receding after overnight excitement following Trumps comment that ultimately, he wanted to see a strong dollar. Whether this was a statement of policy intent, or a response to the dollar hawks, the effect has been short lived. The dollar index is continuing its losing run, with dollar pairs back on the rise.

The pound is on the advance after coming under pressure yesterday. This weakness came after Brexit positioning appear to take a turn for the worse, forcing the into a volatile session.

The euro had a strong session by contrast, with the EUR/USD one of the few dollar pairs to close with only minor losses yesterday. The EUR/USD is pushing higher again this morning. The EUR/GBP managed to reverse previous losses, though is on the back foot again this morning. These moves came as the ECB opted to keep rates unchanged with a relatively hawkish outlook.

The AUD/USD is performing well after suffering relatively minor falls yesterday. The NZD/USD is also performing well after two days of significant losses.

The USD/CAD reversed higher yesterday, but is currently set for its lowest closing levels of 2018. The USD/CHF has continued its spectacular slump as the dollar falls behind the Swiss Franc in reserve currency status.

Yen pairs are subdued as interest in the likes of the euro and pound is cancelled out by yen strength. The USD/JPY continues to weaken however.

Coming up today

Today we have UK preliminary GDP at 09.30.

At 13.30 we have a slew of North American data points including US advance GDP and core durable goods. At the same time, we get Canadian inflation with CPI.

BOE Governor Carney speaks at 14.00 alongside BOJ governor Kuroda.

Trade Idea

Most currencies have performed well against the US dollar of late, but the USD/CHF has been especially notable for the pace of its decline.

The Swiss National Bank may well make intervention noises at some point, but there’s still room for downside until then.

Jan 26th, 2018: Dollar Slips Back After Trump Comments

A good way to play this is a LOWER trade predicting that the USD/CHF will close below 0.9300 in 14 days for a potential return of 170%.

Jan 26th, 2018: Dollar Slips Back After Trump Comments