- No boost for Euro or US Dollar
- Canadian Dollar gains from US trade talks
By Denzil Rickerby
European Commission (EC) President Jean-Claude Juncker’s meeting with US President Donald Trump seemed to have declared a ceasefire in their trade spat, potentially avoiding a full-blown EU-US trade war. Their joint statement pledged to work towards “zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods”. Auto tariffs were not mentioned in the joint statement, however EC President Juncker later said that President Trump made a “major concession” for holding off on further tariffs, including autos, as long as the negotiations continue. Also, he noted that Trump agreed to reassess the measures in the steel and aluminium sector.
No boost for Euro or US Dollar
While it appeared that there was a breakthrough in EU-US trade negotiations, the news provided no lift to the US Dollar, nor the Euro. The US Dollar is now trading as the weakest currency for the week so far, followed by the Euro as the second weakest. This could be down to the fact that the market still remains sceptical, as in May, Trump abandoned a framework for trade negotiations with China within days of it being announced, before ratcheting up tariffs.
Canadian Dollar gains from US trade talks
The Canadian Dollar has benefited from the EU-US trade talks as President Trump’s softened stance on auto tariffs is positive to Canada, as well as North American Free Trade Agreement (NAFTA) talks.
The European Central Bank (ECB) meeting is the major focus for today, but no real change to the central bank’s stance is expected. Interest rates will stay at the present level at least through to Summer 2019, however the market will be trying to ascertain which month.