Global markets reacted negatively on concerns of a trade war between the US and China. The Dow, S&P 500 and NASDAQ have all seen losses. The USD is also trading weaker today, also affected by the firing of the US Secretary of State who was seen as a globalist. Traders are now eyeing US data today,
The GBP jumped yesterday to a high of 1.3910 against the USD after it was reported that the UK was close to coming to an agreement with the EU on a transition deal. Today: UK budget report which is expected to reveal the UK’s smallest deficit in close to 16 years.
The Europeans are seeking clarifications from the US administration regarding the import tariffs, but so far, the uncertainty has not undermined the EURUSD. Friday’s positive NFP boosted US stocks on Friday, but slow wage growth figures overshadowed the NFP.
Busy day today for EUR traders. At 13:30 GMT the ECB will make its policy statement and rate decision. About 6 hours later, the US President is expected to sign the order for steel and aluminum tariffs on European imports. The EU is expected to retaliate, imposing import tariffs on a range American products.
Sterling rose against the greenback yesterday, after positive Markit PMI figures yesterday. Reports from the US that the President’s threat of imposing tariffs on steel and Aluminum just a ‘political show’ has reassured the markets, the CAD however suffered a steep fall.