03/ 06/ 2020

Greenback's Slide Continues,Services Sector PMIs and the Bank of Canada in Focus as Optimism Reigns Supreme

The euro reached an 11-week high yesterday as the dollar lost ground, with investors maintaining their hopes for a global economic recovery. The optimism persisted within markets despite growing concern over U.S.-China tensions and mass protests across the United States over the death of a black man in police custody. Traders remain hopeful that central banks will continue to buy government bonds and other financial assets to protect their economies from the coronavirus pandemic.

Sterling climbed above $1.25 to its highest in a month against the dollar yesterday, as signs Britain might be willing to compromise on sticking points in a fresh round of Brexit negotiations with the European Union provided support. Britain is expected to indicate flexibility over fisheries and trade rules if the European Union agrees to lessen its “maximalist” demands regarding regulatory alignment and fishing access, the Times newspaper reported on Tuesday, as a new round of talks kicks off. Britain has until July 1 to ask for an extension to the current transition period, which ends in December.

The dollar edged higher against the Japanese yen yesterday as risk appetite grew on optimism that the worst of the economic downturn from the spread of the coronavirus is in the past. U.S. stocks gained as cheer over business reopenings overcame concerns about U.S.-China tensions and mass protests across the United States over the death of an African-American man in police custody. 

It’s a busy day ahead. Service sector PMIs put the EUR and Greenback in focus, with the BoC and Brexit putting the GBP and Loonie in the spotlight.

02/ 06/ 2020

Geopolitics and U.S Riots in Focus with the Stats on the Lighter Side

It was back in the green for the European majors on Monday, while Germany was on Holiday. Riots across the U.S and beyond over the killing of George Floyd had little influence. China’s retaliation to the U.S Government’s response from last week also had a muted impact on the majors.

On Monday, news hit the wires of Beijing blocking the import of U.S soybeans and pork. During the U.S – China trade negotiations, soybeans had been a hot topic. Trump needs the support of the farmers and China’s decision to look elsewhere, in breach of the phase 1 agreement, will be a blow. Upward momentum came from a positive headline manufacturing PMI out of China and improved numbers from the Eurozone and the U.S. The economic data suggested that the continued easing of lockdown measures led to a slower pace of contraction. It was far from impressive, however, and a long way to go before a full recovery.

It could be a choppy day ahead for the majors. A lack of economic data will bring U.S – China tensions and rioting in the U.S into focus.

01/ 06/ 2020

Week Ahead | Busy Week with Rate Decisions, PMI Data and Nonfarm Payrolls

Some old and new global risks, other than coronavirus, have been (re-)emerging in recent weeks. US-China relation is heading another step towards cold war with US President Donald Trump’s new set of measures against China announced on Friday. Unrest that started in Minneapolis quickly spread from Los Angeles to Miami to Chicago, with a “I can’t breathe” movement. Brexit negotiations continue to head nowhere. There is no noticeable improvement in coronavirus containment in Brazil, Mexico, nor Russia. But these risks weren’t much reflected in the financial markets. Instead, Australian Dollar ended last week as the strongest one, with much strength seen New Zealand Dollar and Canadian too. Euro was the second strongest as traders cheered the Next Generation EU recovery plan. On the other hand, Yen, Dollar and Swiss Franc were the worst performing ones.

Looking ahead, this week the focus has been less on the pandemic itself and instead on economies reopening, recovery funds and the intensifying US-China conflict. Central banks are in action and China will be in a retaliatory mood. Then there are the stats to begin tracking once more.

28/ 05/ 2020

US ends waivers for Iran's civil nuclear programs in latest maximum pressure campaign move

The United States announced the end of waivers that allowed countries to cooperate with Iran on civil nuclear projects under the 2015 nuclear deal. Secretary of State Mike Pompeo announced Wednesday that the waivers will end following a 60-day wind-down period that is meant to allow businesses to cease operations.The top US diplomat said that an exception would be made to provide a 90-day extension for the waiver that covers ongoing international support to Bushehr Nuclear Power Plant Unit 1 to ensure safety of operations. "We will continue to closely monitor all developments in Iran's nuclear program and can modify this waiver at any time," Pompeo said.

The U.S Dollar is in action later today, with the weekly jobless claims and durable goods orders in focus. There’s also Trump and Beijing to consider.