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Feb 12th, 2018: Dollar Weak Ahead of Trump Infrastructure Plans

Morning Report: 07.00 London

After last week’s excitement markets appear stable, but the S&P 500 still remains down by 2% year to date. The dollar has backed off the pace this morning as Donald Trump prepares massive infrastructure plans – another potential risk event for market traders.

The weak dollar is helping the dollar pairs to advance, with no significant stand-out performer so far. The GBP/USD is higher, but still lagging its peers after heavy selling on Friday. This comes after continued Brexit uncertainty and poor goods balance data.

The EUR/GBP is rising again and gapped higher this morning, almost as a proxy for the power balance in the EU – UK negotiations.

The NZD/USD is gaining interest and is one of the few pairs to be on track for two positive sessions since Friday.

The USD/CAD is also enjoying the dollar backing off, as the oil prices stabilise following the recent slump from $70 to near $60.

Yen pairs are generally lower as dollar interest declines without a corresponding surge in safe haven interest for the yen.

Coming up today

Today, we have MPC member Vlieghe and McCafferty speaking at 09.50 and 16.30 respectively.

RBA assistant governor Ellis speaks at 09.50.

Trade Idea

The AUD/USD has been caught right in the middle as speculators are keen to react to the latest twists and turns of the latest market crisis.

Volatility is likely to be the biggest risk over coming days and weeks. As the AUD/USD has stabilised, there is a risk of rapid reversal this week as traders react and overreact.

Feb 12th, 2018: Dollar Weak Ahead of Trump Infrastructure Plans

A good way to play this a TOUCH trade predicting that the AUD/USD will touch 0.7700 within the next 14 days could return 101% if successful.

Feb 12th, 2018: Dollar Weak Ahead of Trump Infrastructure Plans