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Dollar Slips as Stocks Tumble11 October 2018 by Dave Evans

Morning Report: 07.00 London

Stock markets and the dollar index are rattled right now as investors fret over future rate hikes and Donald Trump warns that the Fed has ‘gone crazy’. Dollar pairs are enjoying the respite and making gains across the board.

The EUR/USD is pushing higher for the third day in a row, back above the 1.1550. The GBP/USD continues to perform well, despite disappointing GDP figures yesterday. Brexit hopes continue to trump wider economic concerns as the pound is set to return to the summer highs. The EUR/GBP is higher this morning, hinting at the first display of strength for the euro since the start of October.

The AUD/USD continues to struggle though, with small gains that barely lift the Aussie off the lows around 0.7050.

The USD/CAD is pausing this morning after hefty gains yesterday. The USD/CHF is an exception as it extends its reversal from the week’s earlier congestion.

The yen pairs are attempting to stabilise after five days of solid losses. The 112.00 level is holding for now. The AUD/JPY is bouncing off support following intense selling to near the 79.00 level. The EUR/JPY is out-performing, making good yesterday’s losses.

Coming up today

At 09.30 today we have the BOE credit conditions survey

MPC member Vlieghe speaks at 11.45.

At 12.30, we have the release of the ECB monetary policy meeting accounts.

US CPI is at 13.30.

Crude oil inventories are at 16.00.

Trade Idea

The Australian dollar slumped against the yen yesterday as traders sought out a safe haven as markets hit their first spot of severe turbulence since the beginning of the year. The AUD/JPY is higher this morning, but the long term trend remains firmly lower.

October 11th 2018: Dollar Slips as Stocks Tumble

A good way to play this is a LOWER trade predicting that the AUD/JPY will close below 79.00 in 14 days for a potential return 129%.

October 11th 2018: Dollar Slips as Stocks Tumble