USD - United States Dollar
The U.S. dollar index is going higher by 0.22 percent amid a “risk-off” mode in the FX capital markets and in other safe haven currencies such as the Japanese Yen and the Swiss Franc. The reason, you guessed it, is the U.S - China trade spat. According to Chinese officials familiar with the talks between the two sides, the most critical hurdle to a breakthrough on trade talks has become President Trump’s credibility. More specifically, President Trump’s comments over the weekend that China had called looking to restart negotiations has been causing some confusion in Beijing, as nobody there seems to have contacted the U.S. negotiators. According to Bloomberg, all the ambiguity has real-world effects for Chinese exporters, with toymakers already losing out on Christmas orders in what should be their busiest quarter. Additionally, in response, governments in the region are following monetary policy moves with a fiscal stimulus of their own.
Weakness in the global equity market is a likely reason for the U.S. dollar bounce. In Europe, the Stoxx 600 Index was 0.4 percent lower at 6:00 am EST. Furthermore, the U.S. 10-year Treasury yield was at 1.471 percent and it continues to fall, while gold was trading flat.
In the U.K., Prime Minister Boris Johnson asked Queen Elizabeth II to suspend the U.K. Parliament from mid-September to mid-October. This move can impede lawmakers’ efforts to block a no-deal Brexit, and it might even trigger a constitutional crisis. The GBP/USD pair is falling 0.6 percent, and the GBP/CAD pair is decreasing 0.40 percent towards 1.2214 and 1.6255 respectively.
1.3250 - 1.3352 ▲EUR/USD:
1.1075 - 1.1118 ▼GBP/USD:
1.2177 - 1.2271 ▼AUD/USD:
0.6731 - 0.6787 ▼NZD/USD:
0.6320 - 0.6355 ▼