Morning Report: 07.30 London
• This morning, the US dollar is on the slide against most other major currencies with the NZD/USD the morning's top mover at +0.75%.
• The euro is continuing to show relative strength after last night's comments from ECB officials that implied the central bank still had the capability to raise rates without impacting on bailout facilities. The EUR/USD is up 0.40%.
• On the subject of rate hikes, the British pound is higher this morning ahead of Thursdays Bank of England meeting. Few are expected a hike that meeting, but as ever, it will be what is said/ implied/ not said in the statement that will get traders speculating. The GBP/USD is up 0.30%. Already this morning the BRC retail sales monitor rose 2.3% while the RICS house price balance dropped by less than expected.
Coming up today:
• The economic calendar is relatively light today with German Industrial Production the pick of the morning news items. Canadian housing starts follow at 13.15 with a gain of 171K expected.
Trade Idea:
• Australia has braved extreme weather in the last month from Forest fires in the west to cyclones in the North East, but the Aussie dollar is holding up fairly well.
• This morning the AUD/USD is up 0.4%, with the AUD/JPY up 0.35%.
• Part of the reason is the rapid rise in commodity prices, a major component of the Australian export economy. However there are signs that interest in raw materials from speculative traders is running a little hot with the Commitment of Traders indicator for the CRB (Commodities) index hitting its highest levels since the 2008 spike.
• With the AUD/JPY sitting just below resistance at $83.70, it could be a good time for a short term down bet on the Aussie dollar.
A good way to play this might be a LOWER trade predicting that the AUD/JPY will close below $83.25 in 7 days time (Feb 15th) for a potential return of 130%.
Summary:
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