Daily Market Update

Markets Whiplash With Trade Headlines; Euro Down on German Data

August 26, 2019

A lot has happened since we went home Friday evening and the greenback has found itself on top of the heap to open the week.


Friday was a day to forget for equity markets as global shares fell as the trade war intensified. After the close, President Trump tweeted that further tariffs on China would be implemented.  The President continued his tough talk much of the weekend at the G-7 conference in France.  Asian shares opened the week with a steep sell-off and American futures pointed towards further declines this morning.  However, the frown has been flipped upside down this morning as President Trump said that China has asked to restart trade talks.  Traders seem confused but for the time being, the two powerful nations are being given the benefit of the doubt.

Despite the dollar mostly remaining on the sidelines through the weekend swings, there is plenty on this week’s schedule slate that can spark volatility.  This morning’s headline durable goods print is positive, showing an increase of 2.1%, up from a forecasted 1.2%.  Orders for non-military capital goods excluding aircraft, often used as a proxy for business investment, also beat estimates. The second revision of Q2 GDP will cross the wire on Thursday and personal income and Chicago PMI are on Friday’s slate.


What to Watch Today…

  • G7 Meeting continues in France

Complete Economic Calendar can be found here.



The Euro traded lower this morning on the back of more concerning data released in the Eurozone’s largest economy.  German business confidence declined to the worst level in nearly seven years. The IFO index of business climate fell to 94.3 in August, its fifth straight decline.  Germany is an export-driven economy and has struggled in the recent environment.  GDP contracted last quarter and it is likely that it will also slow this quarter, which would send Germany into a technical recession.


The Japanese yen was on the offensive early overnight as investors continued to seek the perceived safety of the currency. Indeed, the Japanese yen approached its strongest level in three years. However, USD/JPY shot higher after Chinese Vice Premier Liu said that his country opposes the escalation of the trade war and would be willing to open talks.  Look for the yen to once again gain if the positive rhetoric surrounding trade turns negative.

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