U.S.-China Trade Saga Continues.
Friday 22 November, 2019
Daily Currency UpdateUSD - United States DollarThe U.S.-China saga continued on Thursday after U.S. negotiators attempted to reach a Phase 1 deal with their Chinese counterparts once again. However, talks are expected to break down once again. The Hong Kong Human Rights and Democracy act has been passed to President Trump, and despite China demanding Trump veto the deal, this looks unlikely. Yesterday we saw the Philadelphia Fed survey picked up a little in November rising to 10.4 from 5.6 in October, which was well above market expectations. Also, the number of Americans claiming unemployment benefits were flat at 227k for the week; these numbers are still sitting at five-month highs.WTI crude oil slipped, sending the greenback lower against it commodity-based currency peers as draws on U.S. inventories were less than expected, and trade deal optimism being priced in. WTI is moving lower again down -0.20 percent to 58.45 a barrel.
Key MoversToday marks a big day for the Euro as Christine Legarde is scheduled to make a speech, and November PMI’s are released. Since made President of ECB, Lagarde has remained relatively quiet on monetary policy. However, much like her predecessor, she feels as though the fiscal stimulus is necessary to combat the global recession and sustain the region’s economy. The key take away will be her thoughts on budgetary stimulus going forward. We should see a response from the Euro dependent on her tone. A dovish tone should send the Euro tumbling towards the EUR/USD 1.10 handle. However, a more optimistic view should send EUR/USD on a rally towards 1.11. Germany posted better than expected GDP numbers yesterday, and therefore her tone may resemble the boost.
- EUR/USD: 1.1047 - 1.1087 ▼
- GBP/USD: 1.2850 - 1.2928 ▼
- USD/CAD: 1.3245 - 1.3300 ▼
- AUD/USD: 0.6783 - 0.6803 ▲
- NZD/USD: 0.6399 - 0.6425 ▲