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October 6th, 2017: Rate Hike Hints Drive Dollar Higher

Morning Report: 07.00 London

This morning, the US dollar is on the rise, following up on yesterday’s gains from renewed Fed rate hike talk and better than expected unemployment claims. Analysts are expecting a relatively small increase in payrolls of 82k today.

Dollar pairs are on the back foot, especially the AUD/USD which is being hit by talk of a rate hike from the RBA. The NZD/USD’s downtrend has followed suit.

The USD/CAD is rising again after poor trade balance data yesterday.

The EUR/USD is down, but it’s the GBP/USD that is struggling again, with the pound extending its losing run against the dollar. The EUR/GBP is rising as the euro continues its outperformance.

Yen pairs are following a similar pattern, with the GBP/JPY and AUD/JPY slumping.

Coming up today

Today we have the UK Halifax HPI housing report.

At 13.30, we get the big US jobs report including non-farm employment change, the unemployment rate and average hourly earnings.

Canadian employment change and unemployment data is also released at 13.30.

We get Ivey PMI at 15.00.

Trade Idea

With the prospect of a leadership challenge to Theresa May, markets are taking a dim view of the pound at the moment.

October 6th, 2017: Rate Hike Hints Drive Dollar Higher

A good way to play this could be a LOWER trade predicting that the GBP/JPY will close below 147.00 for a potential return of 148%.

October 6th, 2017: Rate Hike Hints Drive Dollar Higher