03/ 07/ 2019

German & UK Service PMI's Eyed Ahead of Non-farm Payrolls Data

The optimism that boosted the greenback at the beginning of the week faded after the US threatened the EU with $4.B worth of additional tariffs. Euro also got a temporary boost from a report saying that the ECB policymakers are not considering adding monetary stimulus or cutting rates in this month’s meeting, but rather wait until September when they will have fresher updates on economic forecasts.

The Sterling is once again among the weakest currencies across the FX board, falling against the greenback to a fresh three-week low of 1.2583 before bouncing some.

It’s a busy day ahead, the Pound’s troubles continue as Brexit, domestic political woes and a shift in BoE forward guidance weighs. There could be more doom and gloom ahead. Key stats include Germany, France and the Eurozone’s finalized June service sector PMI numbers. Ahead of the finalized figures, Spain and Italy’s service sector PMIs will also be in focus.

02/ 07/ 2019

Markets Float while US & China Trade Talks Hangs in Balance

Dollar continues to trade as the strongest one, riding on US-China agreement to put trade war escalation on hold. US-China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing. China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table, Trump said. No deadline was set for progress on a deal, and the world’s two largest economies remain at odds over significant parts of an agreement.

Financial markets, which have been rattled by the nearly year-long trade war, are likely to cheer the truce. Washington and Beijing have slapped tariffs on billions of dollars of each other’s imports, stoking fears of a wider global trade war. Those tariffs remain in place while negotiations resume.

While euro lost some ground against the dollar yesterday and is the third strongest as unemployment rate dropped to record low of 7.5% in May.

Today’s focus will be around Germany Retail Sales & RBA’S Governor Lowe’s Speech taking place will be the highlight.

01/ 07/ 2019

Week Ahead | Market Reaction to the G20 Summit and Iran to Influence While US-China Trade Tensions keeps Building Up

While the economic data was skewed to the negative, sentiment towards Iran, the G20 Summit and economic outlook drove the Greenback and the majors last week. 

Sterling recovered on Friday from the five-month lows it reached earlier in the day against the dollar and euro, although worries about a no-deal Brexit capped the currency’s gains. By 1430 GMT, sterling was up 0.4% at $1.2712, bringing its gains in June to more than 3%. After touching five-month lows, it returned to positive territory as the dollar index eased 0.15% Against the euro, the pound gained 0.24% to 89.52 pence, recovering from a January low of 89.92. Sterling has now lost 4% of its value against the euro since the start of April, although some of its losses during the past week came as a result of broad euro strength.

Investors are reluctant to take big positions in the pound amid the Conservative party leadership contest, which should end with a new prime minister in place by the end of July. Boris Johnson, the frontrunner, has said Britain will leave the European Union on Oct. 31 deal or no deal. But he has also said there is only one chance in a million of leaving without an agreement in place.

While we can expect the markets to react favorably to news from the G20 Summit, rising tension between the U.S and Iran could be a spoiler. This week focus will be around US ISM, Non-Farm payrolls and ADP change & from Europe Retail Sales, Unemployment Rate.

27/ 06/ 2019

G-20 Summit Jitters ease while Dollar Edges Higher against Rivals

The dollar edged up to a one-week high against the safe-haven yen on Wednesday late session, as some of the jitters ahead of the G20 summit in Japan eased amid hopes for progress there in resolving the Sino-U.S. trade war. Hong Kong’s South China Morning Post, citing sources, said that the United States and China have agreed to a tentative truce in their trade dispute ahead of a meeting between leaders of the two nations on Saturday on the sidelines of the G20 summit.

On Wednesday, the U.S. currency already rose significantly versus the yen, a perceived safe-haven which draws bids in times of political strife, on comments from U.S. Treasury Secretary Steven Mnuchin about a trade deal between the United States and China is “about 90%” complete.

Looking ahead, sentiment towards the U.S – China trade talks at tomorrow’s G20 Summit provided some support following optimistic chatter from the administration.