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August

Trump trials cause Dollar to dip

Published: Wednesday 22 August 2018

  • Canadian Dollar on the back foot? 
  • New Zealand Dollar receives retail sales boost
  • Australia aims for stability
  • Euro yo-yos on global discussions and developments
We have come to a mid-week lull in economic data, so markets are subject once more to political rhetoric and developments. US President Trump has managed to damage the Dollar with snippets coming from the court appearances of his former lawyer and other court investigations into his presidential campaign chairman. These dealt a blow to the USD, which has been strengthening steadily against all its major currency counterparts for weeks now. And this was after the US currency fell a little on Trump’s continued trade war threats.

The Dollar dropping on these revelations allowed the Pound to push back up against its American currency competitor for the first time after a long downward trend. The British Pound also received some words of comfort in the form of reassurances that Brexit negotiations will continue. Deal or no deal? That is the question… and that is the main mover of Sterling in the current market. The world is watching for the next exciting instalment from both sides of the Atlantic…
  
Canadian Dollar on the back foot? 

The Canadian Dollar has been under pressure from lower oil prices and speculation about the next monetary policy actions of its central bank, the Bank of Canada. Will increasing inflation cause them to raise interest rates next month? Predictions for this afternoon’s Canadian Retail Sales results are not promising, so that gives the CAD very little to work with, although it has been strong against Sterling in recent months.

New Zealand Dollar receives retail sales boost

The NZD has received a welcome pick-me-up from positive retail sales results, which surprised markets with an increase of 1.1% over Q2. Growth was far better than analysts had predicted, however, markets are in cautious mode given the current global political and economic uncertainty, so the New Zealand Dollar has not soared up beyond all-important currency trendlines just yet.

Australia aims for stability

The Australian central bank is keeping interest rates on hold in order to create a sense of stability, according to recent announcements. The usually buoyant Australian Dollar seems to be doing well against its key currency pairings, so we will see if their stability measures work in practice, despite some political pressures of their own…
 
word ``Australia`` on twenty dollar banknote

Euro yo-yos on global discussions and developments

The Pound perked up briefly against the Euro after a long decline, but dropped back down again as the EU’s chief Brexit negotiator Barnier confirmed that the Brexit negotiations are now moving to the “final stage”. This currency pair is on a rollercoaster ride on repeat right now, thanks to the ongoing Brexit negotiations and murmurs from all angles. Any Brexit rhetoric has the power to move this currency pairing either way, and any exchange rate movement tends to happen quickly. A lack of data for the UK and the shadow of a no-deal Brexit is keeping the Pound under pressure from the Euro, which has had its own share of troubles in recent weeks thanks to the Turkish Lira. It’s certainly keeping life interesting!

What to watch…

Trump, naturally…

The next, nail-biting stage of Brexit negotations

Central banks in all major jurisdictions: policymakers in Australia, New Zealand, Canada, the US, EU and UK are all vocal currently and on tenterhooks in the uncertain climate, as political and trade troubles take centre stage. This is causing a many a ripple across the currency markets.

Business and consumer confidence reports and retail sales data are some of the biggest market movers data-wise. Industrial data is also being watched closely for trends and any positivity that can support economic health.

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Read more reviews

Read more detailed updates on the latest key currency developments in this month’s Technical Research.