USD: Trade risk taking a break
We kick off the week with very few economic data releases, which is probably a good thing given how much we had to deal with last week. The small “issue” of US vs China also remains quiet, which is slightly suspicious, but again I imagine both sides are working on their next moves. Contributors to further flare-ups will be mainly driven by the next round of negotiations, whenever they materialise. Unfortunately, an increase in economic stress for both sides will probably help finalise the negotiation process, as one side will be forced to bow out.
AUD: Politics reignites confidence
The dollar jumped as the currency markets opened last night following the centre-right government clinging to power during the elections. For the most part, these gains have not been given up just yet, which is so often the way after a political result. For those not fully up to speed with Australian politics, the current government are viewed as stronger economic managers which is rallying short to medium term business sentiment, as well as removing Labour’s tax proposal which is boosting the housing market.
GBP: 4th Commons vote looms
The pound is now trading at its weakest level since February. Unfortunately, those who remained upbeat on GBP prospects following the March Brexit extension will now be sweating as we head back to the 2018 lows. Over the weekend Theresa May offered a new and improved Brexit deal ahead of her fourth attempt at the Commons vote. Whilst improvements to worker’s rights sounds good, the market remains sceptical of the Bill passing through parliament.
Have a great day.