The rollercoaster of the U.S.-China trade spat continues, and Thursday morning the chances of negotiations were higher than they have been in the past week. The dollar was advancing across the board before the consumer price index data for June came out slightly lower.
Trade war optimism
Markets were rebounding Thursday morning off of some newfound optimism surrounding the tit-for-tat tariffs between China and the United States.
After the Trump administration said it would move forward with an additional $200 billion worth of tariffs, Chinese officials are hinting at the need for more formalized talks between the two countries.
China’s Vice Minister of Commerce Wang Shouwen said “we should talk about it.” And reports surfaced that the White House is open to more talks.
European stocks rose on the upbeat outlook, the dollar climbed higher and the Japanese yen slid.
USD/JPY is at its highest level in six months, hitting above 112.6. It’s down slightly after the U.S. CPI data came out.
CPI data disappoints
The U.S. consumer price index data for June came out this morning, largely meeting expectations, but missing on one measurement.
Unfortunately for the dollar, meeting expectations usually doesn’t invoke much of a positive market reaction. The greenback is giving back some of its gains from earlier Thursday morning.
CPI excluding food and energy met expectations of 2.3% growth year over year. The month over month, CPI excluding food and energy also met expectations of 0.2%. The core CPI MoM grew 0.1%, missing estimates of 0.2%.
The EUR/USD pair climbed back up to 1.167 from 1.164. The dollar also gave back gains to the pound, and cable climbed to 1.324.
Theresa May loosens E.U. relationship
U.K. Prime Minister Theresa May has backed down on her demands for U.K. banks to have easy access to the single-market post Brexit.
Instead, it’s being reported that May would accept the equivalent regulatory standards the E.U. has with other countries outside the bloc.
The GBP/USD pair was trading lower Thursday morning around 1.320. After the U.S. CPI data was released, the pair jumped to 1.324.