AUD & CAD Gain on China’s Stance, US Dollar Unmoved by Q2 Growth - US Market Open
AUD / CAD / NZD: Commondity currencies are notably firmer this morning as China’s seemingly softer rhetoric boosts risk appetite. The Chinese Commerce Ministry stated that they are willing to resolve trade tensions with the US provided that they were met halfway. China MOFCOM stated that this would entail the US cancelling its planned additional tariffs, adding that both sides should create conditions for progress. However, while this may have underpinned risk sentiment, focus is now back on the response from the Trump administration, which could see the upside faded if the US rebuffs the gesture.
Italy: BTPs and the FTSE MIB continue to edge higher as the prospect of a more business friendly coalition between the PD and 5star party grows. Consequently, with Italy looking set to avoid snap elections, optimism has grown over the possible passing of the 2020 budget due mid-October.
USD: US Q2 GDP had been revsied lower to 2% from 2.1%, however, despite this, while growth is indeed slowing, it still remains relatively robust, particularly against its major counterpart, while personal consumption has also continued to be strong.
WHAT’S DRIVING MARKETS TODAY
- “USD/JPY, GBP/JPY Forecast: Price May Rally Above Weekly Resistance” by Mahmoud Alkudsi, Market Analyst
- “GBPUSD Outlook: No End in Sight for Trend Lower” by Martin Essex, MSTA , Analyst and Editor
- “Trade War Latest: China Softening Stance, Eyes on US Response” by Justin McQueen, Market Analyst
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