Home Daily Commentaries Optimism about the U.S. – China trade deal starts to wane.

Optimism about the U.S. – China trade deal starts to wane.

Friday 8 November, 2019

Daily Currency Update

USD - United States DollarThe USD/EUR pair has increased by 0.2 percent (stronger U.S. dollar) due to some doubts about the U.S. - China trade deal. Larry Kudlow, White House economic adviser, had said that tariff agreements and concessions would be part of a "phase one" trade deal. At the same time, Beijing's announcement that the U.S. and China have mutually agreed to roll back tariffs as part of a "phase one" have lifted financial markets. However, there are some doubts about how much the Trump administration has agreed to give. Presidential Trade Adviser Peter Navarro told Fox, "There is no agreement at this time to remove any of the existing tariffs as a condition of the phase one deal." Some FX drivers in the market later today will come from the U.S. September wholesale inventories data and the University of Michigan consumer sentiment number for November, as well as from Fed speakers including Atlanta Fed President Raphael Bostic, San Francisco Fed President Mary Daly, and New York Fed President John Williams.

Key Movers

The cost of the trade war is showing a continued contraction in China's imports and exports. However, China's imports and exports fell less than expected in October as optimism increased about a "phase one" deal with the U.S. Exports fell 0.9 percent in dollar terms in October from a year earlier, while imports dropped by 6.4 percent. The Aussie dollar decreased after the central bank published a slightly dovish Statement on Monetary Policy. The AUD/USD pair falls 0.49 percent at the time of this writing.

Expected Ranges

  • USD/CAD: 1.3213 - 1.3250 ▲
  • EUR/USD: 1.1005 - 1.1050 ▼
  • GBP/USD: 1.2760 - 1.2842 ▼
  • AUD/USD: 0.6847 - 0.6890 ▼
  • NZD/USD: 0.6308 - 0.6349 ▼