Dollar Rallies on Rate Hike Speculation

Morning Report: 06.30 London

• This morning, the US Dollar is banging on the door of the April highs after overnight comments a Federal Reserve member comment supporting a September rate hike.

• The S&P 500 also has a positive bias this morning despite the prospect of higher rates.

• Elsewhere, the Australian Dollar is under pressure after storming gains yesterday.

• The NZD/USD is retreating in sympathy.

• The Dollar pairs are generally on the back foot, with the EUR/USD testing the July lows.

                                                                                                                                                                        Coming up today:

• Coming up today, we have UK services PMI at 09.30.

• This is followed by US ADP non farm employment at 13.15 and US + Canadian trade balance at 13.30.

• US ISM non-manufacturing PMI follows at 15.00.

Trade Idea:

The US economic recovery is in stark contrast to the Eurozone’s underlying problems. Further rate speculation could see the EUR/USD rise regardless of the ongoing Greek debacle.

A good way to play this is a LOWER trade on the EUR/USD predicting that the pair will close below 1.0800 in 14 days for a potential return of 148%.

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