- Pound falls on Bank of England report
- German political woes could spell trouble for Eurozone
- Canadian Dollar down on uncertainty
By Charlie Horsley
The US Dollar is steady against its peers today, having failed to extend overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter US-China trade war rumbles on. Asian equities hit a 9 month low, whilst the USD is benefiting from the risk off move, ignoring mixed US macroeconomic data.
Pound falls on Bank of England report
GBP-USD is being dragged lower by the risk aversion due to the US-China trade war and the pair was further weighed down by the latest Bank of England Financial Stability Report, where Governor Carney had less than encouraging comments, which highlighted the domestic risks from a disorderly Brexit scenario.
German political woes could spell trouble for Eurozone
German Chancellor Angela Merkel’s fragile coalition government faces potential collapse as her Bavarian ally, the Christian Social Union (CSU) has threatened to defy her and impose border controls unless their demands to reduce Germany’s immigration burden - which is over 1.6 million migrants since 2014 - are met at the EU Summit. The CSU party want migrants trying to get into Germany to be sent back to the countries where they entered the EU. Chancellor Merkel will try to secure agreements on immigration on a continental level to appease the CSU. Failure to secure an agreement could weigh heavily on the Euro.
Canadian Dollar down on uncertainty
The Canadian Dollar did drop late on as well, after Bank of Canada Governor Poloz flagged up a number of uncertainties that they will look at during the next policy gathering in July.
No news is good news for New Zealand?
The Reserve Bank of New Zealand (RBNZ) left interest rates unchanged at 1.75%. While the central bank reiterated its “neutral” monetary policy stance, the accompanying statement revealed that policymakers have turned slightly more cautious than previous months.