Daily Market Update

U.S. Dollar remains go-to safe-haven

September 10, 2018

The U.S. Dollar has managed to sustain its gains throughout the weekend and in earlier trading sessions as Asian equities tumbled based on trade fears.

Overview

Proposals from the U.S. President Trump’s administration to further escalate the amount in tariffs against China have destabilized commodity markets, thus keeping the greenback strong. Economic data pointing at higher wages and consistent labor activity only aided the buck and the prospects of a Federal interest rate hike on September 26th.

No statistics today will mean paying attention to any surprise headlines, while politics in regions like Latin America become a focus. Chaos in Venezuela, the economic crisis in Argentina, campaign stabbings in Brasil, and shaky commitments from governments to cooperate in battling each front are also affecting Euro-zone banks with deep ties. Global imbalance is a dollar-plus.

EUR

The Euro is still in weak familiar ranges following good news in U.S. growth and worries over further populism taking hold of the continent. While Italian officials have spoken of working together with EU financial officials to keep spending under control, Sweden witnessed a shocking election over the weekend that saw Swedish Democrats, a far-right group there, win a surprisingly large amount of seats frustrating a ruling coalition. Coming into third place with an anti-immigrant message means that center-left establishment leaders will need to negotiate.

GBP

The Pound is on the rise as prospects for a Brexit solution get on their way and Gross Domestic Product provided a sigh of relief. GDP for the month of July came in at 0.3% instead of just 0.1%. Additionally, a report on financial times said that EU leaders from member countries want to give Michel Barnier, the Brexit EU Chief Negotiator, a mandate to close a Brexit deal. Sterling has plenty of chances for moves with some data out this week and renewed government activity.

 

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