Aug 18th 2016: Dollar Retreats on Fed Minutes

• This morning, the US dollar remains under pressure following a mixed response to the release of the minutes from the last FOMC meeting. The report showed a divided Fed, potentially leading to another rate hike before the year is done. The other interpretation is that another rate hike is still far from guaranteed and even if it does come, it could be limited. The US Dollar is on the back foot this morning, as the USD/JPY continues its downside path.

• The euro continues to perform exceptionally well, helped by the dollar’s retreat.

• The Australian and New Zealand dollar have continued their testing of the highs.

• Meanwhile, the USD/CAD continues its remarkable downside run, helped by the ongoing recovery in oil prices.

• Coming up today we have UK retail sales at 09.30.
• Following this, we have European final CPI at 10.00. This is followed by the release of the minutes from the last ECB meeting.
• At 13.30, we get US Philly Fed Manufacturing and unemployment claims, with Canadian foreign securities purchases at the same time.

Trade Idea: 

• The euro might well have storms to come, but in the short term, the momentum is firmly against the US dollar and with the euro.

• A good way to play this is a HIGHER trade predicting that the EUR/USD will close above 1.1400 in 14 days for a potential return of 200%.

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