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Trade war fatigue

USD: Following Monday's mark-down there was no renewed pressure on the dollar yesterday. That is not to say the USD did well: it fell by an average of 0.2% against the other ten most actively-traded currencies, but so did the EUR and GBP. China's announcement of retaliatory tariffs on $60 billion of imports from the United States attracted barely a glance from investors. The tax will be at rates of just 5% or 10%  and, anyway, everyone knew they were coming. It seems that investors are over their trade war shock and are looking for something else to worry about.

EUR: Monthly falls in Italian industrial orders and sales did not provide the substitute, and there were no other economic data from the euro zone. The EU summit meeting in Salzburg, which begins today, will focus on "internal security, migration and Brexit". The first two of those are unlikely to have any bearing on the EUR: the third conceivably might. European Central president Mario Draghi will be making an appearance in Berlin this morning, where he will talk about "Making Europe's Economic Union work". He could just possibly touch on monetary policy as a tool to promote that objective.

CAD: It was a better day for the Loonie, which came second behind the AUD with the addition of half a US cent. The sole Canadian economic statistic was for manufacturing shipments in July. They increased by 0.9% - more than expected - but did no good to the CAD at the time. Rising oil prices provided a helping hand though: WTI went up by 1.9%.

GBP: Another day bereft of UK economic data left sterling to rely on Brexit-deal optimism for support. Speaking of the back-stop arrangements for the internal Irish border, EU negotiator Michel Barnier said "we are ready to improve this proposal". However, the British prime minister's spokesperson cautioned that "just as the UK has evolved its position, the EU will need to do the same". Investors are waiting to see what the Salzburg summit will bring.

JPY: As if to underline how little they care about the latest escalation of the tariff war, investors left the yen at the back of the major currency field for a second day. For its part, the JPY failed to excite the market. Overnight the Bank of Japan surprised nobody when it kept its benchmark interest rate at -0.1% for a 33rd month. It is eight years since the rate was last above 0.05%.

USD shows no reaction to China's retaliatory tariffs

USD shows no reaction to China's retaliatory tariffs

EUR steady against USD ahead of Salzburg summit

EUR steady against USD ahead of Salzburg summit

CAD gets a lift from rising oil prices

CAD gets a lift from rising oil prices

GBP steady as Brexit negotiators make soothing noises

GBP steady as Brexit negotiators make soothing noises

JPY again the back marker as Bank of Japan stays on hold

JPY again the back marker as Bank of Japan stays on hold

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