Dollar erases losses following optimism on US-China trade deal
June 26, 2019
President Trump warns of “Plan B”, or billions more in tariffs, if there’s no progress on a trade deal after the planned meeting between himself and Xi Jinping during the G20 Summit. Crude oil rose 1.8% driving the Canadian, New Zealand, and Australian dollars higher.
"Have patience with all things, But, first of all with yourself."Saint Francis de Sales
June 26, 2019
EUR/USD 1.1357 GBP/USD 1.2684 USD/CAD 1.3157 AUD/USD 0.6979 USD/JPY 107.64 USD/CNH 6.8849 USD/ILS 3.5952 USD/MXN 19.1700 USD/CHF 0.9776 USD/INR 69.1550
The dollar holds steady following weaker durable orders and a mixed commodity outlook but hovers near three-month lows leading up to this week’s pivotal G20 summit. Although Trump warns of a potential “Plan B” if there is no movement on the US-China trade talks, he stated there was a possibility of progress during the G20 Summit. The renewed optimism boosted the 10-year Treasury bond yield and helped the dollar erase some losses from the FOMC’s dovish shift last week.GBP
The pound strengthened against other major European currencies this morning after US Treasury Secretary Steven Mnuchin claimed the US-China trade deal is “about 90% of the way” complete.
Bank of England Governor Mark Carney stated that a stimulus is more likely in the event of a no-deal Brexit. A no-deal Brexit remains in the cards as PM front-runner Boris Johnson hasn’t ruled it out if there is no agreement by October 31.EUR
The euro retreated from its three-month highs as bond yields hit a record low. In an effort to lift the eurozone, Mario Draghi continues to test legal limits as he states that self-imposed limits on how much debt the ECB can buy could be raised.CAD
Aided by stronger oil prices, the loonie is modestly higher this morning although market sources cite some profit taking on USD/CAD shorts.ASIA/PACIFIC
The yen holds steady today as Asian stocks set to head lower amid concerns over the American economy and trade talks with China. The BoJ is set to buy bonds in shorter maturities.
Asia stocks declined as investors remain cautious ahead of the G20 meeting between President Trump and Xi Jinping.
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