Aug 8th 2016: Dollar Continues Dominance

• This morning, the US dollar continues to dominate following Friday’s better than expected Payroll figures. These numbers increase the likelihood of a Fed rate hike despite a small increase in the unemployment rate. The dollar index is on the rise, while the dollar pairs drop.

• The GBP/USD continues to fall after last week’s BOE activity, with the EUR/GBP on the rise again this morning.

• The yen pairs have reversed their previous course, with the USD/JPY pushing higher on the stronger dollar.

• The NZD/USD is the worse performing currency pair this morning, falling lower despite better than expected Chinese trade balance data.

• We’ve a very quiet day today, with Canadian Building Permits is the only real highlight at 13.30.

Trade Idea: 

• The EUR/GBP is on the rise this morning, building on last week’s momentum. The move only brings the pair to the top of a recent trading range though and could be reversed as quickly as it appeared. While the BOE have unleashed a stimulus package and cut rates, the euro area is still struggling with high unemployment in many regions.

• A good way to play this is a LOWER trade predicting that the EUR/GBP will close below 0.8400 in 45 days for a potential return of 153%.

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