Morning Report: 07.15 London
- This morning, the US dollar remains in control after very mixed data yesterday. Philly Fed manufacturing came in above expectations, while unemployment claims came in better than expected. The US dollar is on the rise this morning.
- The dollar pairs are on the back foot, with the euro holding firm in line with the ECB’s stance on interest rates.
- Meanwhile, the yen pairs are bouncing slightly after a risk-off move yesterday inspired by the mixed US data.
Coming up today:
- We start the day with a suite of European data points starting with French Flash manufacturing and services PMI at 08.00. Following this, we have the corresponding German data at 08.30 followed by Eurozone wide data at 09.00.
- After this, we get UK services and manufacturing PMI.
- At 13.30, we switch to Canada for core CPI and retail sales.
Trade Idea:
- There have been many false dawns for oil prices of late and the latest round of volatility has pushed prices back down to monthly lows.
- The Canadian economy is still largely dependent on the price of oil, so its not surprise to see the USD/ CAD climbing recently.
- With no strong oil trend in price, we could well see higher prices for the USD/ CAD.
- A good way to play this is a HIGHER trade predicting that the USD/ CAD will close above 1.3150 for a potential return of 131%.
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