- US Dollar weaker due to Trump-isms
- Sterling recovers a little but no supporting data ahead
- Brexit rhetoric reigns on both sides of the Channel
By David Johnson
The price of crude oil slipped after the G20 group warned that there are increasing risks to the global economy and that would dent demand for the black stuff (talking about oil, not Guinness). Oil was also under pressure due to yet another Trump comment. This time he was warning Iran never to threaten the US, accusing China and the EU of manipulating their currencies (The Federal Reserve’s 4.5 trillion Dollar Quantitative Easing (QE) budget was clearly forgotten at that point) and he warned the Federal Reserve against raising the base rate again because the strong US Dollar is a disadvantage to America. How is that not a currency manipulation then?! Trump will meet the EU’s Jean-Claude Juncker on Wednesday to discuss trade tariffs.
Speaking of the EU, Britain’s new Brexit minister says "Britain will refuse to pay its £39 billion divorce bill to Brussels if the EU fails to agree a trade deal." That won’t stop the posturing on either side of the Channel, but it sounds tough. Meanwhile the FT is reporting that the EU has rejected the latest plans for the city of London’s access to the EU markets. Of course they have; it isn’t the 59th minute of the 11th hour yet. Sterling did recover a little on Friday, though, after a pretty dire week. We start this week with the Pound around €1.12 and $1.3150.
Japanese Yen on the up
The Japanese Yen strengthened on speculation that the Bank of Japan may make some adjustments to its economic stimulus policy, tightening the money supply, presumably.
Limited week for data
Today’s data is limited. We have Canadian Wholesale Sales and US Existing Home Sales and a speech from one of the Bank of England’s policymakers. That’s your lot. The week ahead is barely any more interesting...
The European Central Bank (ECB) will make an interest rate announcement on Thursday, but no change is expected. The key data of the week is the US economic growth number for Q2. 2.0% is the forecast, so any change from that will impact the USD either positively or negatively.
And the world is obsessed about icebergs melting, but none more so that the townsfolk of Innarsuit in Greenland. An iceberg has run around near their village and it’s a big’un. It is 200 metres wide and estimated at 12 million tons. They are concerned that, if bits of it thaw and fall off, that could flood the town with waves. Let’s hope the UK’s current weather front doesn’t turn towards Greenland and warm things up, then.