03/ 09/ 2019

Dollar Outshines the Rivals on Concerns of Easing ECB Monetary Policy & No-Deal Brexit

Sterling wallowed near a more than two-year low earlier today on growing investor worries about a “no-deal Brexit” as rival British lawmakers fought for control over negotiations to leave the European Union. The euro fell to the lowest in more than two years as weak economic data from the EU underscored expectations for the ECB to ease monetary policy at a meeting next week. The pound is likely to remain under pressure ahead of a vote in Britain’s parliament about Brexit later today, the outcome of which could trigger an early election and Britain’s exit from the EU without trading agreements.

A messy exit from the EU is certain to weaken the pound, but it could roil other currencies as investors adjust their positions to exit trades in riskier assets. Some politicians have warned that a no-deal Brexit should be avoided at all costs, because leaving the EU without trading agreements in place could cause economic turmoil with further officials are forwarding a vote to delay the Brexit from EU by 3 months more.

Looking ahead, it’s all eyes on the UK Parliament as Pro-Remainers battle it out with Brexiteers with ECB’S Nominated President Lagarde speech. US ISM Manufacturing PMI & RBA Statement & Interest Rate decision is also due out later today.

01/ 09/ 2019

Week Ahead | Escalating Trade Wars, Brexit battle & Non-farm Payroll in Focus

The yen strengthened on Monday, thanks to bigger appetites for safe-haven assets as Washington and Beijing put additional tariffs on each other’s exports, adding to the gloom hanging over the global economic outlook. “There are a lot of risk events this week from U.S. and Chinese economic data, which should help us see who is hurting more from the trade war, but we don’t think a solution is imminent,” said a senior foreign exchange strategist.

The United States slapped 15% tariffs on a variety of Chinese goods on Sunday while China imposed new duties on U.S. crude oil. U.S. President Donald Trump said the sides would still meet for talks later this month, but hopes for a resolution to the trade war have diminished. The euro stood at $1.0991, unchanged in Asia, but sentiment for the common currency was weak after it tumbled on Friday to the lowest in more than two years. German Chancellor Angela Merkel’s conservatives and her coalition partners held off a surge in far right support in two state elections in eastern Germany on Sunday.

The result averted an immediate political crisis in Europe’s largest economy, but expectations are high that the European Central Bank will cut interest rates at its next monetary policy meeting on Sept. 12, which could weigh on the euro. Looking ahead major stats will be out on the latter part of the week such as UK GDP & US NFP & Chinese CPI Index.                                                                                                                

29/ 08/ 2019

Dollar Steadies Against Majors as Recession Fears Persist

The dollar held gains against the safe-haven yen earlier today as ebbing recession worries soothed markets after earlier volatility although the pound nursed its losses as investors became increasingly worried about a hard Brexit. However, traders may remain concerned about U.S. currency policy because President Donald Trump has complained that the dollar is too strong and has repeatedly attacked the Federal Reserve for not cutting interest rates further. 

Sterling fell 0.6% against the greenback on Wednesday after British Prime Minister Boris Johnson moved to suspend parliament, seen as a bid to limit debate ahead of the Oct. 31 deadline for the UK to leave the European Union. That increased expectations of a “no-deal Brexit,” which would mean a departure without trading agreements in place. Jittery conditions in the UK Parliament with Boris Johnson could face a vote of no-confidence in his government, and possibly an election further derails the pound.

It’s a busy day ahead on the economic data front. Brexit, stats out of the Eurozone and U.S GDP numbers are all in focus.

28/ 08/ 2019

Dollar's on the Move as Trade Talks are back in Focus

Pressure on the dollar was back on Tuesday, as nagging fears the Sino-U.S. trade war will drag on and severely hurt economic growth led to yet another slide in U.S. bond yields. The greenback started on a shaky footing this week, but then recovered as safe-haven Treasury yields bounced from multi-year lows after U.S. President Donald Trump softened his tone against China and predicted the two countries would be able to reach a trade deal. But optimism on trade negotiations wilted as China’s foreign ministry dismissed U.S. suggestions that there had been contact between the two sides, and said it hopes Washington can stop its wrong actions and create conditions for talks.

Sterling rallied against the dollar after Britain’s opposition labour party leader Corbyn said he would do everything necessary to prevent Britain leaving the European Union without a divorce deal. While Euro is yet struggling to get a stable ground.

Looking ahead, the Dollar’s on the move. German consumer confidence figures could add further pressure on the EUR. While US-China tension will still be the market driver for today.