The U.S. dollar was under pressure during yesterday’s session and found no relief overnight as the Trade War is back in the forefront.
Self-described “Tariff Man” was on a roll yesterday by announcing new tariffs on Brazil and Argentina and threatening new tariffs on French goods. Speaking in London, President Trump said he had no deadline to get a China deal done and liked the idea of waiting until after the election to finalize a deal. Commerce Secretary Wilbur Ross piled on by indicating that the December 15th date to add new China on tariffs was a “really good time” as it would not affect consumers this Christmas season. This was seen as another admission that the trade war is indeed having a negative effect on the consumers. That said, Black Friday and Cyber Monday sales broke records, showing the American consumer continues to carry the U.S. economy.
As a result of all the trade headlines, the greenback fell, and equity markets traded solidly in the red. Yesterday’s dismal manufacturing prints added to the sour risk environment. There is no major economic data slated for release in the States today so expect market participants to continue to digest the renewed threats of trade tensions today.
What to Watch Today…
- No major events scheduled for today.
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The Australian dollar jumped to near a one-month high against the U.S. dollar after the Reserve Bank of Australia kept rates on hold. The move was widely expected by economists and comes after the central bank cut rates three times since June to spark the economy. The RBA is likely to cut rates again in 2020 but the relatively bullish move to keep rates unchanged today gave the Aussie dollar a small boost.
The British pound took full advantage of a weakening dollar and traded to its strongest level since October 22nd versus the U.S. dollar. The sterling also found support on new signs that the Conservative party might be extending their lead just over a week before the election. A Kantar survey put support for the Conservatives at 44%, while the Labour party polled at just 32%.