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A fortnight ago Trump announced another new 10% import tax on €300bn of Chinese goods from 1 September and investors reacted by flocking in droves to the safe-haven Japanese yen and running away from Australian dollar. Yesterday he postponed the tariff until 15th Dec wanting to avoid a policy that would make things more expensive for consumers. Investors reversed their bets selling the Japanese yen (-1%) and buying back the Australian dollar (+0.6).

Sterling benefited from The House of Commons speaker, John Bercow, who declared he will fight to prevent a shutdown of Parliament by the Prime Minister and acknowledged that Parliament can prevent a no-deal Brexit, thereby keeping alive the prospect a no deal will be avoided.

Yesterday’s data caused little reaction to German and euro-zone investor confidence data. The same is true this morning after an announcement that German gross domestic product shrank 0.1% in Q2 and data from the UK employment market showed unemployment rose to 3.9% with average basic earnings rising by the same amount. US inflation rose to 1.8% and is still low enough for the US central bank to keep cutting interest rates.

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