The US dollar started yesterday’s session broadly stable but began to take on water after the Conference Board’s consumer confidence reported a substantial fall in optimism with the reading coming in at 125.1 for September compared to August’s reading of 134.2. Consumer expectations also fell, as measured by the Conference Board, to the lowest reading since January which was tainted by the Q4 equity market slump. The downside pressure didn’t stop there as late on in the session calls for president Trump’s impeachment increased. Nancy Pelosi, the House speaker, said the Democrats will open a formal investigation into Trump’s election campaign following allegations the president urged Ukraine’s leader to probe opposition candidate Joe Biden in the run-up to the 2020 election. Trump may have discussed $250m in military aid to Ukraine which has already been approved by Congress as a bargaining chip for the probe. Pelosi’s announcement that impeachment proceedings will begin came shortly after president Trump’s pledge to release a transcript of his call with president Zelenksy on the 25th July. The impeachment process is the first since Bill Clinton in 1998 and put the US dollar on the back foot against G10 currencies. The dollar has advanced this morning, however, on news that Chinese companies are preparing to purchase more US pork. The news follows yesterday’s story that Chinese companies have begun to purchase more US soy as tariffs begin to unwind on the politically sensitive exports. The convergence towards a trade deal may speed up after China’s beige book reported the economy was the weakest it has been all year in Q3.


Sterling rallied following the Supreme Court ruling yesterday where 11 senior judges deemed the government’s suspension of parliament was unlawful. The rally wasn’t seismic, however, as there still remains a lot of ambiguity in the Brexit process with just over a month left until the next deadline. Sterling rallied purely because the prospect of another suspension of parliament, in order to force through a no-deal on October 31st, now seems distant. The rally merely saw GBPUSD close at Monday’s high but the rally has been reversed this morning as the pound now trades at the same level as Monday’s open. Today, PM Johnson is expected to land back from the UN meeting in New York at around 11:00 BST, a mere 30 minutes before MPs are expected to retake their seats in the House at 11:30. Sterling will likely resume normal service with parliament back in play, trading off of political headlines.


The euro has traded in an almost identical way this week, opening and closing near similar levels. Yesterday saw the single currency pounce on broad USD weakness, reversing Monday’s losses sustained from poor PMI data out of Germany, only for it to give up ground yet again as the greenback surges this morning. With today’s data out of the way for the Eurozone economy, where Spanish PPI fell 1.5% MoM in August, the single currency will focus on the global macro story and the sustainability of this morning’s US dollar strength under the threat of presidential impeachment.


The loonie jumped on the back of a weakening US dollar yesterday to rally 0.16% but has since relinquished said gains this morning as the greenback claws back some ground. Reports on China’s economy slowing the most in Q3 this year has put further pressure on oil markets this morning, pushing WTI prices down to $56 per barrel as demand weaknesses come to the fore yet again.



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