Dollar Bulls Fill Their Boots And Euro On A Downer ======== As is often the case during the first week of the month, markets have spent much of the last few days tip toeing around Friday’s US Non Farm Payrolls data release. Traders were not disappointed by the release as a healthy 321,000 jobs were added last month, the most since January 2012 and the tenth consecutive month of +200,000 gains. This beat even optimistic assumptions from analysts who were looking for a net gain of 231,000. The dollar index has been chomping at the bit to push higher and Friday’s jobs data was enough to set the Greenback on course for its sixth straight month of gains. The prospect of an interest rate hike is the main catalyst for this push higher, while the Fed turns off the Quantitative Easing taps. While the employment rate is important, it is not the only factor that the Fed is weighing up in their decision on when to raise interest rates in 2015. Just as in the UK, while US employment and GDP have impressed, wage growth has stagnated. Average hourly earnings are still just 2.1% higher than they were a year ago, still well below the 3% target that the Fed is looking to achieve. Average wage growth does seem to be picking up, but many economists are questioning whether it is enough to push a rate hike forward from the middle of 2015 as is the current census. Forex markets appear to be making their own mind up however, the dollar index closing up the week around 1% higher and the USD/JPY notching gains of nearly 2%. Riding the USD/JPY until it stops ======== The USD/JPY has now made sizeable gains for the last seven weeks and while this cannot last forever, it would take a brave man to fight the tide of this trend. We took a bullish bet on the USD/JPY as we have for many of the previous weeks and will keep humming the same tune until the pair shows a significant reversal. A good way to play this is a HIGHER trade predicting that the USD/JPY will rise and close above 121.50 in 10 days time for a potential return of 123% if successful. Or put another way, betting that the USD/JPY will keep pushing higher and close above 121.50 on the 19th of December could return £22.36 from every £10 put at risk. info.binary/1yxQnXt
Posted on: Tue, 09 Dec 2014 06:11:49 +0000
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