The construction PMI from UK today was another positive number to support GBP, which did not give us a chance to short it.
The CPI Flash estimate and Core CPI flash estimate from EUR were both positive than expected and previous, as mentioned, these were largely from higher oil price in Dec.
The FOMC meeting minutes came out in the afternoon of NY session, basically the FED warned of growing inflationary risk from Donald Trump’s proposed fiscal stimulus measures. This is generally negative sentiment for USD because now there is less chance for FED to hike rates further which was largely the expectation of most traders for 2017.
****My mistake: there is actually more chance for FED to hike rate to tighten the economy to prevent inflationary risk; so today’s negative sentiment into USD is really from the uncertainty of the future for investors****
Although overall the FED is still confidence toward the U.S economy, but the cautious tone for inflation has certainty dragged down the strength of USD.
Service PMI from Euro countries have been promising alone with the good manufacturing PMI from Monday to boost EUR strength.
WTI finished up above $53 alone with the weak USD, growing PMI numbers from eurozone countries and expectation for OPEC agreement all boost CAD to another strengthen trading.
Equity markets were largely green to further help commodity currencies CAD and also AUD, especially the China capital control has loosen a bit to support AUD again.
NZD still suffered from the low GDT price yesterday, but the risk on sentiment has helped it today.
Tomorrow we will have Service PMI from GBP and ADP Non-Farm Employment Change from USD.
ISM Non-Manufacturing PMI and Crude oil inventories are also coming out tomorrow.
As the risk events lie ahead of us tomorrow, we’re not going to take any USD & GBP trades for Daily Trade.
The sentiment has also shifted a bit as the FED minutes signalled more uncertainty for the U.S future under the new president and policies, these could help safe heaven currencies such as JPY & CHF as we are seeing large buying into Bond market today as well to correlate this situation.
AUD & CAD are the 2 currencies to buy for now and EUR is still the currency to sell. JPY & CHF are also good to sell but just to know that if tomorrow we have negative datas from U.S, that will help to support JPY, CHF & EUR.
We will trade GBP risk event as usual, looking to sell GBP upon negative surprise but instead of USD, we’ll go with AUD.
Max is 55.9 and Min is 53.5
We are also looking to buy USD upon positive deviation against EUR. We can also sell USD upon negative deviation against AUD but with tight stop loss as we’ll be against stronger currency and NFP is coming after tomorrow.
Max is 200K
Min is 140K
ISM Non-Manufacturing PMI will come after ADP so will be less effective, and will only be tradable alone with ADP’s direction. So if ADP is positive, than looking to buy USD upon positive deviation and vide-versa.