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Yen Rallies as China Posts GDP Slowdown21 January 2019 by Dave Evans

Morning Report: 07.00 London

The Japanese yen is in demand as China’s economy grows at its slowest rate since 1990. This drop was expected, yet still the confirmation is enough to funnel interest into the Japanese yen and away from the US dollar.

Yen pairs have gapped lower this morning, falling just short of fulling closing the 2019 opening gap around 110.00. The AUD/JPY is unchanged so far, but generally keeping up the pairs’ rally from the New Year flash crash lows. The EUR/JPY is also unchanged so far, with the euro showing some relative strength.

The GBP/JPY is slipping back following Friday’s reversal as Sterling generally lags. Confidence in Brexit has waxed and waned throughout the last 12 months, but Friday so significant sag, helping the EUR/GBP to rally back up to test 0.8850. The GBP/USD came in for heavy selling on Friday as well, reversing most of the week’s gains. The is some consolation buying this morning, in line with other dollar pair.

Dollar pairs generally are on the rise, helped by the softer US dollar. The EUR/USD is on the charge and making back most of Friday’s losses. The AUD/USD is also making gains, with the 0.71500 level acting as support.

The USD/CHF is slipping back slightly, pauses in its rally off the lows that has put it back within a day’s session of the parity line.

The USD/CAD is on the back foot, help by the weaker dollar and returning confidence in the Canadian dollar.

Coming up today

Today is a public holiday in the US in observance of Martin Luther King Day.

Trade Idea

The Canadian dollar continues to strengthen, helped by solid oil prices and economic uncertainty surrounding the US government shutdown.

Yen Rallies as China Posts GDP Slowdown

A good way to play this is a LOWER trade predicting that the USD/CAD will close below 1.3200 in 14 days for a potential return of 136%.

Yen Rallies as China Posts GDP Slowdown