At first glance, it appears that the U.S. dollar is under pressure against all of the major currencies as investors wait for Trump’s list of tariffs on China. However on an intraday basis, USD/JPY is holding onto its gains into the NY open and trying to edge slightly higher.

With that in mind, a trade war is bad for everyone and negative for risk appetite so its difficult to imagine that we’ll see significant rallies in currencies today.

Canada has the largest decline in 10 year yields which explains why CAD is also the weakest currency but after having breached 1.3150, the pair is due for a correction.

EUR is struggling to recapture 1.16 and took hit from reports that Angela Merkel’s government is at the brink as its coalition partner plans to end their alliance. While the currency recovered its initial losses this development should limit the recovery in EUR/USD.

The Australian and New Zealand dollars are under pressure with NZD leading the slide after weaker manufacturing PMI numbers. The Yen seems to be unfazed by the Bank of Japan’s lowered CPI assessment.

The U.S.’ Empire State manufacturing survey and University of Michigan Consumer Sentiment report are scheduled for release today but the main focus will be on China tariffs. One of my strongest views today is GBP outperformance.

The MAIN THEMES I see today are: - EUR, -CH, +CAD,+GBP

Trading Biases

+GBP, +USD, +CAD
-EUR, -CHF, -AUD, -NZD
mildly +JPY

Today’s Initial Trades

Here’s the summary:

1. Sell EURGBP at .8730, Stop at .8758, Target .8702
2. Sell CHFJPY at 110.83, Stop at 111.11, target 110.55
3. Sell EURUSD at 1.1589, Stop at 1.1617, Target 1.1561
4. Sell USDCAD at 1.3140, Stop at 1.3168, Target 1.3112

Close ALL open day trades by 10:20AM NY / 15:20 GMT