May 18th 2016: Soft Start for Euro

• This morning, the euro is lagging on reports that the IMF is pressing the EU to allow Greece to skip paying interest payments.

• The EUR/ GBP is lower despite UK inflation and PPI coming in below expectations yesterday.

• The US dollar is on the rise amid reports that markets are being overly pessimistic overly the prospects of a US rate hike.

• The USD/ JPY is pushing higher on a similar move.

• Elsewhere, the Australian dollar is flashing red despite oil prices testing new highs yesterday.

• Coming up this morning, we have UK average earnings index at 09.30, released alongside claimant count change and the unemployment rate.
• Following this we have European final CPI at 10.00.
• The main ticket is the release of the FOMC meeting minutes at 19.00, preceded by crude oil inventories at 15.30.

Trade Idea: 

• The pressure on the Australian dollar is yet to relent and as such, we could well see further downside from here.

• A good way to play this is a lower trade predicting that the AUD/ USD will close below 0.7200 in 14 days for a potential return of 200%.

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