News & Analysis
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South Pacific currencies fell on fears US President Donald Trump will sign the Hong Kong bill, which could become a new impediment to a narrow trade deal being reached.
Trade optimism ebbed yesterday as trade experts and people close to the White House said the completion of a “phase one” US-China trade could slide into next year as Beijing presses for more extensive tariff rollbacks.
Sterling’s gains from Monday began to erode yesterday, with the losses extending this morning. Boris Johnson and Jeremy Corbyn squared off in a television debate last night, exchanging barbs on the NHS, trust, and of course Brexit.
The dollar was lower yesterday after a rare meeting between President Trump and Fed Chair Powell. The meeting saw the policymakers discuss topics such as dollar strength and negative rates.
While markets remained in the dark about the possibility of a phase one trade deal being struck between the US and China, and the greenback traded mixed in such an environment, the loonie didn’t fare well in either scenario.
The US dollar traded with a mixed tone last week, with idiosyncratic reasons and changes in broad risk appetite driving losses for AUD, KRW and MXN and gains for NZD, ZAR and GBP.
Australian jobs data delivered a gut punch to the currency. The Australian dollar was the worst performing major currency against the greenback last week.
On Friday, US stocks rose to all-time highs as Treasuries ground lower following comments from Trump’s economic adviser Larry Kudlow, who said trade talks are coming to “short strokes”.
The dollar weakened across the board yesterday, posting gains against the Antipodean currencies only yesterday. The Japanese yen was the best performing G10 currencies yesterday as reports emerged that the US and China are struggling to finalise the first phase of the trade deal.
This morning’s German GDP beat may offer some support in the short term. The Eurozone’s largest economy was widely expected to have entered a technical recession in Q3.