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Tariff Increase Worry Markets02 August 2018 by Dave Evans

Morning Report: 07.00 London

The dollar index is on the ascendency, forcing dollar pairs lower. The AUD/USD is lower for the second day in a row as Australia braces itself for China’s economy feeling the impact of a 25% jump in tariffs. These fears are trumping better than expected trade balance figures. Yesterday’s FOMC meeting passed without much interest, while ADP payrolls increased more than expected.

The EUR/USD is lower for the third day in a row, while the GBP/USD dips below 1.3100. The EUR/GBP is unchanged this morning after hefty losses yesterday.

The USD/CHF is continuing its recovery rally back towards parity, almost erasing Monday’s losses.

The USD/JPY got rejected at the 112.00 resistance level. The yen pairs are generally on the back foot, as money flows into the regional safety of the Japanese yen. Most pairs including the GBP/JPY and EUR/JPY have reversed Tuesday’s rally.

Coming up today

UK Construction PMI is at 09.30.

The BOE meeting is at 12.00, with expectations for an increase in rates to 0.75%. As ever, it will be the forward forecast that makes the difference to markets. Governor Carney speaks at 12.30.

US unemployment claims are at 13.30.

Trade Idea

The euro is under pressure this morning, though largely remains range bound. The June lows look a good target.

August 2nd, 2018: Tariff Increase Worry Markets

A good way to play this is a ONE TOUCH trade predicting that the EUR/USD will TOUCH 1.1500 within 14 days for a potential return of 163%.

August 2nd, 2018: Tariff Increase Worry Markets