Markets await UK CPI data.

Key Movers

The Trump administration confirmed the implementation of its new round of tariffs yesterday with another $200b of Chinese imports due to be hit with a 10% levy from the 24th September. This will rise to 25% from the New Year should no progress be made re: the impasse between the US and China by then. The measure had been announced a couple of months ago so there was nothing unexpected with the confirmation however equities and risk assets briefly dipped at lunchtime yesterday before recovering throughout the US session. China immediately announced retaliatory measures in an effort to counter the perceived US aggression. Stocks are up this morning with USD/JPY managing to stay above the 112 handle showing, for now, the markets (outside of China) are tolerating the measures despite most bourses being lower over the past few months. There has been a small dollar sell off over the past few days which may indicate that although investors are comfortable with the current economic situation of the US, some expect a slowdown throughout 2019 and into 2020 as a slowdown in global trade permeates through to America. Data-wise this afternoon we have Building Permits and Housing Starts from the States.


The euro has caught a bid over recent days rumours of a potential 2019/2020 slowdown in the US economy starts to hit the greenback. EUR/USD which was as low as 1.13 a month ago is currently trading above 1.17. Tensions over Turkey dissipating has also pushed the shared currency higher and further EUR/USD gains could be possible should sentiment over the US economic outlook be called further into question. The main event from euroland today is a talk from ECB President, Mario Draghi in Berlin where he is due to discuss the future of economic policy for the bloc. EUR/USD is at 1.17 with GBP/EUR back down to 1.1250 after falling short of 1.13 in Asian trade.


After a summer suffering from Trump/trade rhetoric the Aussie seems to have stopped the rot over the past couple of weeks as investors look further in the future and what the US Presidents aggressive trade policy may mean for America. AUD/USD has pushed above .72 when a couple of weeks ago a move into the .60s for the first time since Jan 2016 seemed on the cards. There is little news of note from Down Under this week so all eyes will be on US/China. GBP/AUD sits at 1.8160.


CAD caught a bid yesterday on the back of jump in oil prices as news came from Saudi Arabia that it would tolerate higher oil prices and not increase production on the back of the reintroduction of international sanctions against Iran. USD/CAD had traded above 1.3050 very early yesterday however the news from the Middle East drove the oil-linked loonie higher with USD/CAD now trading below 1.2950. Fridays inflation number is the next big release from Canada expecting to show a monthly fall of -0.1% after last month’s huge 0.5% rise. GBP/CAD trades at 1.7030.


Like the Aussie the Kiwi has risen over the past week as traders reconsider their USD positions. Tonight sees Q2 GDP numbers from NZ with a healthy 0.8% uptick expected after last Q1’s solid 0.5% growth. NZD/USD trades at .66 with GBP/NZD at 1.9925.