Trump Strikes Again with Import Tariffs on Automotive, Will It Impact the Bulls?

Daily Update - 24th May 2018

Yesterday’s Market

• EUR Markit Manufacturing PMI
• GBP Core Consumer Price Index  & Retail Price Index
• USD FOMC Minutes

Yesterday’s Focus

The EUR/USD is trading around the 1.1700 level ahead of Today’s European market session, and the pair is struggling to develop a bounce from Wednesday drop. Against the backdrop of Italian political uncertainty, the shared currency was further weighed down by weaker-than-expected economic data. The latest EU PMI fell short of consensus estimates and pointed to a slowdown for the fourth consecutive month. The UK inflation fell to its lowest in over a year. The GBP/USD pair fell to 1.3304 after the inflation report was out yesterday.

 

Today’s Market

• EUR German GDP & EUR Monetary Policy Meeting Accounts from ECB
• USD Continuing Jobless Claims
• GBP BOE's Governor Carney speech

 

Today’s Focus

The FOMC was pleasingly optimistic for Dollar bulls, and the USD gained ground against its major counterparts including the Euro as the FOMC signaled it is comfortable with allowing inflation to run higher within the US economy, bedding down market concerns of excessive rate hikes throughout 2018, at least temporarily.

Thursday brings a new challenge for the US Dollar, as the Trump administration gears up to deploy hefty tariffs on foreign vehicle imports, delivering a blow to NAFTA renegotiations as the US government employs the already-familiar Section 232 of citing national security concerns as an impetus for trade tariffs.

The Euro Committee is having a meeting in Brussels today and will be attended by many EU officials as well as ECB members including ECB President Draghi.