Daily Market Update

Dollar Flat; Dove Downs Sterling

June 26, 2018

After falling modestly over the last two sessions, the U.S. dollar was mostly unchanged overnight.


The traditional safe-haven was unable to rally yesterday despite a deep global sell-off in equity markets. The Dow Industrial Average was down over 500 points at the low on renewed trade war worries. China’s President XI Jinping said “in our culture, we punch back’, escalating the rhetoric. Trade worries are not limited to China. American icon Harley-Davidson has announced they may be moving some operations overseas due to increased costs from the EU’s retaliatory tariffs against the Trump administration’s duties on steel and aluminum. The announcement was met with strong words from the President, but some worry that this may be the tip of the iceberg and American businesses adjust to a possible trade war (s).

The Euro slipped slightly overnight and fell from a one-week high against the U.S. dollar. However, EUR/USD remains within 1% of its 11-month low.

Light economic data also gave traders little impetus bump the greenback out of recent ranges and that story is likely to continue into today. Tomorrow, however, starts the week’s heaviest risk events. Durable goods orders will be released at 8:30 a.m., followed by GDP on Thursday. Personal spending and income will highlight the week’s data on Friday.



The Japanese yen continues to be the least ugly option for currency traders amidst escalating trade tensions. The safe-haven currency gained 0.1% overnight, and extending its gains to two week high against the U.S. dollar. Trading USD/JPY has been fairly easy as of late. As trade tensions rise and equities sink, the yen has gained. A reversal of risk attitudes could see the yen retreat to ranges last seen at the beginning of June.



The British pound had been gaining since Thursday’s surprise split vote on interest rates, but gave up some of its recent gains overnight. Incoming Bank of England member Jonathan Haskel spoke and said he sees risks to raising interest rates too fast, perhaps establishing himself as a “dove.” However, he did say that he agrees with the BOE’s “broad direction” for interest rates.


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