Home Daily Commentaries US-China Trade War Rhetoric Rears Head Amid Lack of Economic Data.

US-China Trade War Rhetoric Rears Head Amid Lack of Economic Data.

Daily Currency Update

GBP strengthened early on Thursday following a press report that the UK was set to stay in the customs union with the EU, but as far as GBP currency pairs were concerned, it was a fairly quiet day yesterday. GBP/USD hovered close to 1.35, slipping below the big figure following the release of the stronger than expected Philly Fed Manufacturing Index yesterday afternoon. It’s unchanged this morning and with the calendar looking light on data again, it could be another rare but steady day for the pound.

Key Movers

It was a mixed session for the dollar yesterday. US unemployment claims data printed weaker than expected, but only slightly, and then, as mentioned above, Philly Fed Manufacturing Index was a beat. USD/JPY rallied before New York came online helped by rising US treasury yields, which supported a broader move higher in the dollar. But this move was tempered later on as a war of words on US/China trade reared its head again with Trump calling China “very spoiled on trade”.


There isn’t much by way of economic data due for release from the States today. A couple of Fed members are due to speak and inflation data from Canada may cause some action in USD/CAD. The war of words between U.S. and China may also intensify. Other than that, it looks set to be a steady finish to the week.


The euro opens weaker this morning. It fell below 1.18 vs. the USD yesterday morning as the greenback generally pushed higher through the day, and the pair opens below the 1.18 figure this morning. Stronger than expected producer inflation data has failed to lift the single currency this morning too.


EUR/GBP is also weaker this morning and while there’s little by way of data to influence the pair over the next 12 hours or so, rhetoric, media reports and rumours on a UK/EU customs union may drive some volatility in the market. A lack of liquidity may also fuel a bit of action.


AUD/USD has drifted lower over the last 24 hours or so, tracking EUR/USD to an extent. It’s also indicative of the mixed Australian employment data released yesterday. No economic data to make mention of from the overnight session, at least as far as the AUD is concerned.


Unlike other currencies over the last 24 hours or so, we’ve seen a fair bit of volatility in the Canadian dollar. It weakened overnight with USD/CAD pushing convincingly though the 1.28 level as the U.S. trade czar Lighthizer declared that NAFTA countries were “nowhere near close to a deal” and that there were “gaping differences” on the likes of agriculture, energy, labour etc.

The loonie has retraced a little since but traders will be wary ahead of today’s release of Canadian inflation and retail sales data. Markets expect the month on month headline CPI reading to print at 0.3%, although there’s a risk, given the rising oil prices of late, that this may actually come in stronger.


Like most other commodity currencies the NZD came under selling pressure for most of the day yesterday. NZD/USD fell to a low of .6870 before bouncing back overnight. It opens above .69 this morning, but only just, and looks a little vulnerable as risk sentiment worsens amid the intensifying war of words on trade between China and the U.S.

Expected Ranges

  • GBP/USD: 1.3470 - 1.3545 ▼
  • GBP/EUR: 1.1400 - 1.1470 ▼
  • GBP/AUD: 1.7900 - 1.8040 ▲
  • GBP/CAD: 1.7220 - 1.7400 ▼
  • GBP/NZD: 1.9470 - 1.9620 ▲