News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Gold prices failed to retake the uptrend from the May 2019, March 2020, and March 2021 lows, and are nearing their monthly low. Get your $XAUUSD market update from @CVecchioFX here:https://t.co/qkCdUJFtc2 https://t.co/ldbYm2U0vC
  • The US Dollar continues to push higher against ASEAN currencies after the FOMC rate decision. This leaves the USD/SGD, USD/THB, USD/PHP and USD/IDR outlook mostly tilted higher. Get your market update from @ddubrovskyFX here:https://t.co/zn56iTXcpk https://t.co/NmQzIm39lj
  • Latest update on #Evergrande focusing on the Australian Dollar "Australian Dollar Eyes Evergrande as USD Bondholders Still Await Interest Payments" #AUD $AUDUSD https://www.dailyfx.com/forex/market_alert/2021/09/24/Australian-Dollar-Eyes-Evergrande-as-USD-Bondholders-Still-Await-Interest-Payments.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/AAU8nMn0ou
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/3bjMHrUZRJ
  • 🇹🇭 Balance of Trade (AUG) Actual: $-1.22B Expected: $0.97B Previous: $0.18B https://www.dailyfx.com/economic-calendar#2021-09-24
  • Heads Up:🇹🇭 Balance of Trade (AUG) due at 03:30 GMT (15min) Actual: $-1.22B Expected: $0.97B Previous: $0.18B https://www.dailyfx.com/economic-calendar#2021-09-24
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/DWm7cC4v7H https://t.co/uhBNvCTHrW
  • Evergrande USD bondholders say have yet to receive interest due Thursday -BBG
  • The US Dollar seems to be back on the offensive against its major counterparts, pressuring EUR/USD and NZD/USD lower as USD/JPY consolidates. USD/CHF surges past key resistance. Get your market update from @ddubrovskyFX here:https://t.co/MrLGSp7FYa https://t.co/J0vSWHaADc
  • Gold prices gain as potential systemic risks out of China's Evergrande Group roil broader markets. Meanwhile, iron ore is ticking higher after a big drop on Monday as China steps up steelmaking curbs. Get your market update from @FxWestwater here:https://t.co/l4kAWDrr7M https://t.co/nmP0MX8LGM
GBP Could Be Hit if US-China Trade War Makes London Pick a Side

GBP Could Be Hit if US-China Trade War Makes London Pick a Side

David Cottle, Analyst

UK, US-China Trade War Talking Points:

  • London has just opened a stock trading link with Shanghai
  • This is emblematic of Britain’s relationship with China
  • However ties to the US are older than stronger and would probably win out if a choice were forced on the UK

Join our analysts for live, interactive coverage of all major economic data at the DailyFX Webinars. We’d love to have you along.

This week the UK has launched what it calls a groundbreaking stock market link: the London-Shanghai Stock Connect.

Four years in the making, the system will allow companies to list in both cities via depository receipts. These are aimed at smoothing out current risks such as currency moves and differing account rules.

Here then is another sign that China is plugging itself into global financial capitalism. But more broadly it’s also another step for the UK along a tightrope all countries must walk between China and the United States.

The UK has managed the balancing act rather well so far even if the walk hasn’t always been wobble-free.

London has Played Both Sides With Some Aplomb

It joined China’s Asian Infrastructure Development Bank in 2015, adding notably to the project’s credibility over strong objections from Washington. London supports Chinese President’s Xi Jinping’s Belt and Road initiative more covertly, but Chinese companies have been encouraged to bid for UK projects at the highest level, including the provision of nuclear power.

The British government is still mulling the wisdom of allowing controversial telecom giant Huawei to be involved in the provision of fifth generation mobile services in the country. And it’s here perhaps that its third-country difficulties can be most plainly seen. The US and other allies have made it clear that to keep Huawei on board might threaten intelligence sharing with the UK and it seems very probable that the company will after all be barred even if Beijing might retaliate.

On the other side, the UK remains a very strong political and military ally of the US of course. It participates in vast projects such as the F35 combat aircraft program at a level achieved by no other nation. The bilateral investment field between the two is among the strongest economic relationships on Earth. The UK is the largest foreign investor in the US, and vice versa.

It Must Choose the US If Forced, Mustn’t it?

That’s one big reason why the UK has at least as much interest as anyone in not being forced to choose between the two world giants. That prospect is not yet certain but, with no end in sight of the trade dispute between China and the US, it is hardly unthinkable.

If the UK ever leaves the European Union, it is going to need major trading allies. So far, its attempt to cultivate both the global hegemon and its premier challenger have been reasonably successful. If Washington were to force the issue the UK would probably have come down on its side, assuming that the profoundly anti-American opposition Labour Party under Jeremy Corbyn never sees power.

Escalating trade conflict between China and the US will pose massive risks for the UK and for a Pound Sterling already battered by the storms of Brexit.

Brexit Blues. British Pound Vs US Dollar, Daily Chart

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES