News background and trading ideas for 10/08/2018


Last week ended for the dollar relatively on a minor note. The reason – the weak data on the NFP. That is, the number in itself in +134K is not harmful, but the markets expected a much higher value of the indicator (+185K). The negative effect was compensated partially for by unemployment figures, which dropped to the lowest since 1969 values and turned out to be expected – the fact was 3.7% with the forecasts 3.8%. So, nothing terrible happened, especially if the weak NFPs are attributable to force majeure as a Hurricane Florence. We already observed a similar picture last year, when, after the hurricanes Harvey and Irma, NFP generally went out in the negative zone (-33K).
So we do not see threats for the dollar so far, and its decline on Friday is an excellent opportunity for cheaper purchases.
But there are pairs in which we would recommend selling the dollar (both for hedging purchases and for additional income). This is the British pound, as well as the Canadian dollar             . On Friday, there were quite a lot of critical macroeconomic statistics in Canada, and it turned out to be excellent. Employment came out much higher than in forecasts (+63,300, with an outlook of +25,000 in August – 51,600), as well as a trade balance (+BOT $0.53 billion against the estimates -BOT $0.50 billion and a value in July of -BOT $0.19 billion). These data on Friday, basically, were not worked out in any way, since they were in the shadow of the NFP statistics. Therefore, we consider that today that the markets most likely will nevertheless decide to incorporate these figures into the prices of the USDCAD             pair. So our trading idea is USDCAD             sales
Concerning the pound, generally, the past week was good for our basic idea, since the news from the Brexit fronts confirmed our assumption that there would be a deal anyway. Let us remind that the next round of negotiations with the EU will take place on October 18th, but the parties are actively working on its conditions and are looking for, and most importantly, finding compromises on the most problematic issues. So we continue to buy a pound.

Pressure on the Russian ruble             continues. The regular scandals with Russian intelligence officers and the simultaneous accusations of the Russian Federation from the United States, Great Britain, and the Netherlands were referred to. That is, the question of new sanctions is essential, which means it will be complicated for a ruble             growth, even with crude above $80 a barrel. Our recommendation is to sell the Russian ruble

Generally, today should be calm at least because there are holidays in USA, Japan, and Canada.

By admin