- Progress in China-US trade talks weakens US Dollar
- Turkish Lira on the back foot again
- World economic data overshadowed by trade concerns
By David Johnson
Some progress has been made in the trade talks between China and the US. That has eased pressure in the markets a little and the US Dollar weakened just a smidgeon as a result. Quite the opposite is true of the Turkish Lira, which is weakening again after the US warned of more sanctions against Ankara. That downwards pressure on the Turkish Lira is threatening further ‘contagion’ with other emerging market currencies. That word, ‘contagion’, is an odd one, because there is very little direct link between these emerging currencies other than the fact that they aren’t safe places to lodge funds during nervous geo-political times.
Sterling suffers as Brexit talks continue
Thankfully, the UK is not being threatened by US sanctions, but Sterling is being shackled by the Brexit rhetoric
. So yesterday’s strong retail sales data on its own was only just enough to stabilise the Pound near the bottom of its recent ranges. And speculation that the EU is about to scupper the Prime Minister’s Brexit proposal have kept the Pound on the back foot. Sterling will be susceptible to volatility from Brexit talks today because there is no other UK data to focus on.
World economic data overshadowed by trade concerns
Today’s data is limited to inflation numbers from the EU and Canada and the Consumer Sentiment Index from the US. However, as we have seen, these hard facts are consistently overshadowed by the comments and wrangling coming from trade negotiators, politicos and central bankers.
Speaking of which, the Governor of the Reserve Bank of Australia (RBA) was testifying to the Australian Parliament yesterday, but anyone hoping for unexpected insight was utterly disappointed. What we learned is what we already knew; that Australian interest rates are likely to stay low for quite some time. Not exactly a ‘TA DA!’ moment. We will get to see the minutes from the last RBA meeting next week and we can expect more of the same.
How many legs would you like with that?
And here’s a curious story. A restaurant in Mexico City has been shut down, not for health and safety reasons, but because they were selling tacos filled with... (it makes me a bit queasy just writing this)… scorched tarantulas. And not just any tarantulas, but the Mexican Red Rump tarantula, which is an endangered species. Who on earth would want to eat a tarantula?! Sorry if you are reading this over lunch. Or brunch.
Spiders aside, have a great weekend, everyone.