Greenback And The Trump Affect

, , Leave a comment

Dollar-growthGreenback And Commodity Pairs Rally

The US jobs report last Friday was typical of what we have come to expect from the monthly NFP announcement. Expectations for an increase in the labor rate were much more generous than the actual report. Initially the markets sold off the Greenback until common sense prevailed later in the session and all was reversed.

A strong jobs report would most definitely have convinced the market of a rate increase coming as early as November. An interest rate increase by December is very much in the cards, and most certainly with the USA presidential elections in the rear view mirror by then.

It looks very likely that the year will end with at least a .25 basis point increase. As of now the US Dollar Index (DXY) looks to breach the 97.11 high of the year and far beyond.

The Trump Affect

As we know all too well, the markets DO NO LIKE CHANGE and with Hillary Clinton leading in the polls at present, no change to the current status quo is expected. As we all know too well from Brexit just a few months ago – the polls at the time were so wrong.

Personally, I have a sneaky suspicion with all that’s happening in our volatile world these days, the USA may be in for a shock also. The most ardent of scholars said Donald Trump would be over and done within weeks of starting his campaign; up until now they have been so wrong. it’s laughable. So let’s wait and see – the next few weeks sure will be interesting.

Loonie Rallies On Oil

The Canadian Loonie found some strong support early Monday as oil prices made a new high for 2016. Russia announced it was willing to partake in an oil production freeze to try bolster prices and keep them there. For the first time in years it looks like the oil producers are on the same page. However, to look for cohesion between the Energy producers with any degree of longevity is far fetched in my opinion. I just can’t see that holding for too long. On the other hand, the market wants to believe it and this is evident in the Usd/Cad staging a nice rally later in the session Monday.

Cable Catches Traders Sleeping

It’s been another one of those months so far with so many different events influencing Forex direction. Of course, most traders were caught off-guard last week during the “flash crash”, as the Cable (Gbp) had the bottom fall out it in less than a few minutes only to make a partial recovery. I can just imagine Stop and Limit orders were opened and closed before most traders knew what had hit them. It was in the middle of the night in the UK, so traders either woke up with accounts doubled or margined out.

Trade The Trend

As the flash crash plunged the British pound to 1.1991 against the U.S. Dollar, our recently launched automated trading strategy, Trend Trader, was shorting the cable at the time and banked over 683 pips. Trend Trader also banked profit during the drop in the cable at the time of the Brexit. In fact, since 2010 when this strategy first started being tracked on independent 3rd party verification website, myfxbook, the strategy has consistently returned profitable results year after year. Learn more about trading with the trend.

100716 100716b
 

Leave a Reply

(*) Required, Your email will not be published