FX Brief: NFP and Trump EU trade speech eyed
Fawad Razaqzada August 2, 2019 8:12 AM
A summary of news and snapshot of moves ahead of the US session.
- FX update: Safe-haven JPY has remained the strongest major currency for the second day after President Donald Trump shocked the markets with a series of tweets that the US would impose 10% tariffs on $300 billion of Chinese goods that are not currently taxed. As a result, the safe haven yen was the strongest major currency on the day and the risk-sensitive Aussie was the weakest. The Dollar Index, which hit a new 2019 high before selling off yesterday, is lower again as investors wonder whether the escalation in US-China trade dispute may increase the odds for further Fed rate cuts after the central bank opted for a hawkish cut of 25 basis points in mid-week.
- Stocks continue to struggle amid trade concerns while crude oil has managed to rebound after taking a nosedive the day before. Gold remains underpinned ahead of US jobs report.
- Up next: The focus is turning to US jobs data, due for publication at 13:30 BST (08:30 ET). See our NFP report preview article. Then Trump will speak at 18:45 (13:45 ET) on Trade with European Union, in Washington DC. Will he announce EU auto tariffs?
- Data recap: Beating expectations were retail sales from Australia (+0.4% m/m vs. +0.3% expected), Italy (1.9% m/m vs. 0.4%) and Eurozone (+1.1% m/m vs. +0.3%), while UK construction PMI (45.3 vs. 46.0), Swiss CPI (-0.5% vs. -0.4%) and Spanish Unemployment Change (-4.3K vs. -21.4K) all disappointed.
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