​The Trump administration has not yet formally deployed the long-awaited latest $200 billion in tariffs against China, but a new Wall Street Journal report indicates that Japan might be next on the agenda.
Article / 12 July 2018 at 15:10 GMT

US dollar rally hits a CPI speed bump

FX Trade Strategist /
By Michael O'Neill

Trade tensions eased somewhat, and that sparked a rally in global equity indices. Wall Street joined the party. The Dow Jones Industrial Average jumped to 24,868.26 at the open compared with yesterday’s closing price of 24,802.90. The S&P 500 is up 0.56% to 2,789.31. Wall Street traders took solace from this morning’s tiny miss in headline inflation data. US June CPI rose 0.1%, below the 0.2% gain expected.

The equity market bounce and the CPI data took the wind out of the sails for the US dollar rally, at least for the time being, but the price action has been uninspiring.

EURUSD has bounced within a 1.1652-85 range since New York opened. The intraday technicals are bearish following the break of uptrend line support at 1.1690 which suggests further weakness to 1.1590.

The commodity currency bloc is struggling to gain upside traction during this lull in US dollar demand. AUDUSD and NZDUSD continue to be weighed down by China/US trade tensions, and dovish domestic central banks. AUDUSD has climbed from 0.7370 in early New York trading but its bumping into resistance in the 0.7405-10 area. The trend is still negative, and it is well-below Monday’s 0.7480 peak.

Oil prices have had a nasty 24 hours. Oil was hammered yesterday due to the US dollar and concerns of fresh supply from Libya. WTI oil fell from $74.07/barrel to $69.91/b today. Prices are consolidating just above the bottom thanks to the International Energy Agency warning that “production losses could impact the global supply cushion”.

USDJPY broke above 111.40 overnight, and it hasn’t looked back A break above 112.80 opens the door to a test of the 2018 peak of 113.40.

 USDJPY daily.                                                                                              Source: Saxo Bank
12 July
John Shaw John  Shaw
Fear not. Markets will be back a panic next week on "renewed" trade fears. I think this is like the 6th time around. Sad actually to think how the markets move on emotion so much.
12 July
Michael O'Neill Michael O'Neill
I agree with you.There is a lot of trade fear wood to chop between now and the end of august


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail