Feb 18th 2016: Oil Volatility Continues as US Economy Impresses

• This morning, the US dollar index has a negative bias after another volatile day on world oil markets. US economic data was generally impressive yesterday, but the FOMC meeting minutes continued to paint dovish picture on rates.

• As the US dollar continues to soften, the Japanese yen is taking advantage with the USD/ JPY and GBP/ JPY dropping this morning.

• A big winner with yesterday’s oil price rally was the Canadian dollar, with the USD/ CAD dropping heavily (helped by the weakening US dollar).

• Despite a general improvement in commodities, the Australian dollar is struggling this morning, following poor domestic employment data and below expectation Chinese CPI.

• The New Zealand dollar is holding up well by contrast.

Coming up today: 

• Today we UK construction PMI at 09.30 with a small drop expected.
• European unemployment rates follow at 10.00.

Trade Idea: 

• The British pound continues to struggle, while the Canadian dollar is finding its feet. Oil prices haven’t quite stabilised, but they have at least stopped their almost daily sell-off. With Brexit uncertainty continuing to pressure the British pound, there could be more downside for the GBP/ CAD.

• A good way to play this is a LOWER trade predicting that the GBP/ CAD will close below 1.9300 in 14 days for a potential return of 183%.

Powered by: Binary.com