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Dollar Stalls as Trade Deficit Jumps07 March 2019 by Dave Evans

Morning Report: 07.00 London

The US dollar’s advance is stalling after it emerged that the US trade deficit widened despite Trump’s recent trade negotiations. In addition, yesterday’s ADP payrolls came in below expectations. The dollar index is unchanged this morning after six straight days of gains.

The AUD/USD is performing well and undoing some of yesterday’s losses as its trade surplus grew more than expected. The AUD/JPY is also on the rise, though still remains below resistance around 79.00.

The EUR/USD is on the back foot ahead of today’s ECB meeting and holding above support around 1.1300 for now. The GBP/USD made gains yesterday and held the 1.3100 level, with only minor selling this morning. The EUR/GBP is unchanged after two days of losses that has kept the EUR/GBP below 0.8600.

The USD/CAD is pausing after another brutal rally for the US dollar against the Canadian dollar. Political uncertainty and low oil prices are combining to hurt the Canadian dollar.

The USD/CHF is making small gains, but is still struggling to break through the 1.0050 level.

The USD/JPY is making small gains after a slight step back yesterday. The GBP/JPY and EUR/JPY are relatively unchanged this morning though.

Gold continues to struggle after failing to break $1340 in February, now trading below $1285.

Coming up today

At 12.45, we have the ECB main refinancing rate and monetary policy statement. The press conference follows at 13.30.

FOMC member Brainard speaks at 17.15.

Trade Idea

The USD/CHF continues to struggle to make significant traction in either direction, with the 1.0050 level acting as resistance for now.

There are chinks showing in the dollar’s armour and a good way to play this might be to bet on lower levels for the USD/CHF.

Dollar Stalls as Trade Deficit Jumps

A good way to play this is a LOWER trade predicting that the USD/CHF will close below 1.0025 in 14 days for a potential return of 101%.

Dollar Stalls as Trade Deficit Jumps