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Daily Brief

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British Pound moves after BoE decision

USD

There were conflicting comments by US trade representatives after yesterday’s comments by the Chinese Ministry of Commerce spokesman, Gao Feng. Feng stated that both sides had agreed to cancel additional tariffs as progress continues in their negotiations. However, while White House advisor Larry Kudlow stated there would be tariff agreements and concessions in the Phase One trade deal, advisor Peter Navarro when speaking to FOX Business Network, said there was “no agreement at the present time” to remove any tariffs. He also accused the Chinese of “negotiating in public”. Conflicting comments by senior US officials could get traders concerned over the continuing of successful negotiations. Investors are hoping for a positive ending to these talks as anything different could have a damaging effect on currency, equity and treasury markets.

EUR

EUR/USD remains under pressure as economic news out of the Eurozone remains negative and economic numbers coming from the US remain positive. With growth expectations at the lower end for the Eurozone in 2019 and 2020, there does not seem to be a positive outcome in the near term.

GBP

The British Pound was the main mover over the last 24 hours of trading after the Bank of England rate announcement yesterday. While leaving rates unchanged, the accompanying statement showed 2 members voting for a rate cut, while warning that the labor markets, still one of the stronger parts of the economy were turning lower. In his comments, BOE Governor Carney spoke about slower growth in both the UK and the rest of the world, stating “interest rates may fall if expansion remains weak.”

JPY

As U.S.-China trade talks continue, traders are easing away from safe haven trades, which is a negative factor for the JPY. As reports continue to come out between the US and China and if there are some disparities about these reports, traders could move back into safe haven currency at the moment trade talks turn negative. 

CAD

Canadian jobs are expected to grow at 15,900 jobs in October, after creating 53,700 jobs in September and 81,100 jobs in August. The unemployment rate is expected to remain unchanged at 5.5%. The unemployment rate has been at 45 year lows for most of this year.

CNY

According to Reuters, China’s exports and imports declined in October. Exports fell 0.9%, and imports fell 6.4%, beating analysts’ forecasts. The Chinese economy is growing at a slower pace than expected with the trade war continuing between China and the US. According to exports, continued slow global growth should continue to weigh on the Chinese economy. 

USD: Conflicting comments by US trade officials regarding trade talks.

USD: Conflicting comments by US trade officials regarding trade talks.

EUR: EUR continues to trade lower amid poor economic numbers.

EUR: EUR continues to trade lower amid poor economic numbers.

GBP: GBP pressured after dovish BOE.

GBP: GBP pressured after dovish BOE.

JPY: JPY trading at week’s lows as trade talks continue.

JPY: JPY trading at week’s lows as trade talks continue.

CAD: Canadian employment numbers expected lower after two strong months.

CAD: Canadian employment numbers expected lower after two strong months.

CNY: Chinese exports and imports decline.

CNY: Chinese exports and imports decline.

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