Aug 15th 2016: Japanese Growth Slows

• Markets are quiet this morning, despite Japanese growth slowing – GDP came in flat compared to an expected 0.2% rise. The USD/ JPY is unchanged after losses on Friday. The dollar is also unchanged after recovering from the lows in the last trading day of last week.

• Dollar pairs are mixed, with the euro showing small losses and the pound making back some of Thursday and Friday’s losses.

• The Australian dollar is on the rise, while the NZD/ USD continues to unwind last week’s spike higher.

Coming up today: 

• Coming up today we have US Empire State Manufacturing Index at 13.30.
• We have a public holiday in France and Germany today.

Trade Idea: 

• While the GBP/ USD is quiet this morning, there’s no denying the underlying weakness in the British pound right now. The Bank of England waited for more data before hitting markets with a big stimulus and rate cut package. However, this came after only very early post-Brexit data. The BoE could have further to cut as more data comes through in the coming months.

• A good way to play this is a LOWER trade predicting that the GBP/ USD will close below 1.2850 in 45 days for a potential return of 133%.

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