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US stocks rebound as Trump gives trade war hope

27th August 2019 Market Update

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🇬🇧 GBP –  There was no data from the UK yesterday, because of the bank holiday. Today the only piece of data being released from the UK is high street lending, which is expected by the market to edge higher. However, this will realistically have no impact on the FX market. Politically, Angela Merkel gave Boris Johnson hope by stating that a solution could be found “in the next 30 days”. However, the onus remains very much on the UK to provide an alternative to the backstop, as has always been the case. Sterling remains in a relatively strong position against the dollar and euro, just short of the highs for August.

🇪🇺 EUR – The German IFO business climate index reading came in below expectations, and final German GDP for Q2 came out inline with market expectations this morning at -0.1%. Concerns remain that the German economy could enter a technical recession this year, and this adds further weight to this concern. Tomorrow there is no data of significance from the eurozone.

🇺🇸 USD –  The stock market was buoyed as Trump stated that China was keen to arrange a trade deal with the US. The lower levels of risk could translate to a weaker US dollar, as the market looks to move funds out of safer assets. The US dollar weakened yesterday as core durable goods came out below market expectations at -0.4%. This afternoon CB consumer confidence is being released from the US, although that is expected to drop off from the previous reading.

 

Summary:

GBP: Sterling buoyed as a result of Merkel’s optimistic comments
EUR: Concerns remain around the German economy
USD: US stocks improve on Trumps trade war remarks


 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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