Brexit opponents attempt to block Parliament suspension; additional tariffs possible on Chinese goods this weekend
Laurence Hayward | August 30, 2019
The Chinese look to try and dampen the rhetoric on trade tariffs with the US, but a 15% tariff is due to come in to force this weekend. New UK PM Boris Johnson’s desire to suspend parliament for 5 weeks in the lead up to the Brexit deadline will be looked at by two courts on behalf of Brexit opponents today.
“Summer’s lease hath all too short a date.”William Shakespeare
August 30, 2019
EUR/USD 1.1041 GBP/USD 1.2220 USD/CAD 1.3271 AUD/USD 0.6738 USD/JPY 106.14 USD/CNH 7.1525 USD/ILS 3.5280 USD/MXN 20.0883 USD/CHF 0.9876 USD/INR 71.4063
The dollar continues it’s slow strengthening, helping the Dow which rose 326 points yesterday. US – China trade tensions remain in focus, with the US Chamber of Commerce urging both sides to withdraw tariffs and return to the negotiating table. A 15% tariff will be imposed on approximately $110B of Chinese imports this weekend. The US yield curve is still inverted with the 10 year yield falling below the 2 year. Some pundits view this as a pre-cursor to a recession.GBP
Boris Johnson’s attempt to suspend parliament will be scrutinized today, with two courts set to rule on challenges from Brexit opponents looking to block prorogation. This could lead to a minimum of a vote of no confidence. Consumer confidence fell to a six-year low for the month of August with a reading of -14.
Sterling had a relatively uneventful day, closing lower while the FTSE 100 benefited to end the day in the green.EUR
The euro was helped yesterday when Klass Knot said more Central Bank stimulus was not guaranteed. Q2 GDP fell to +0.4% q/q and to 3.6% y/y from 5% from 0.9% in Q1. Today the euro fell close to its lowest level of the month.CAD
The Canadian dollar strengthened after Q2 GDP beat its forecast. WTI oil is also helped as it held above $56 a barrel.ASIA/PACIFIC
The Chinese yuan strengthened its most in two weeks. Other Asian currencies also look very soft due to the trade dispute between the US and China. The Aussie and New Zealand dollars are both losing ground due to the strong US dollar. The South African rand is following suit.
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