Euro Near 13-Month Lows, TRY Continues To Plummet

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1. Euro Near 13-Month Lows, TRY Continues To Plummet
The euro traded near 13-month lows in early Monday trading while the Turkish lira sell-off continued. The TRY lost more than 20% in a massive sell-off sparked by US president Donald Trump’s decision to double tariffs on metal imports last week. The slide in the Turkish lira also sparked a sharp sell-off in the South African rand and boosted demand for safe havens such as the U.S. dollar and the yen. The euro was hit hard on Friday after the Financial Times reported that the European Central Bank had concerns about banks in Spain, Italy and France and their exposure to Turkey.*

2. Oil Prices Dip As Trade Tensions Drag
Oil prices dipped on Monday on rising trade tensions amidst the US and China, but recent U.S. sanctions against Iran pointed towards tighter supply and thus provided some support for oil prices. Specifically, Crude Oil WTI (USOIL) lost 0.3% to last trade at $67.42, while Brent Oil dipped 0.34 percent to trade at $72.55 as of 7:00 GMT. It should be noted, that demand growth from Asia in now being questioned due to the negative impact of trade wars, a stronger dollar and rising funding costs. **

3. Will The CNY Continue To Plummet?
The CNY has suffered the consequences of the trade war sparked by the US along with other major currencies such as the EUR and the TRY. This week, the release of major Chinese July indicators will be closely watched for tariffs impact as they could determine the fate of the CNY for August. Industrial output data is due to be released early on Monday morning with analysts forecasting a growth of 6.3% y/y for July, accelerating from the prior 6.0% rate. Investment in urban areas is also expected to have risen by 6.0% y/y in the year-to-date in July, the same pace as in June. Growth in retail sales is forecast to remain steady, at 9.0% y/y in July. While the forecasts appear positive, any weaker than expected reading could have an adverse effect on CNY pairs.***

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*Source: CNBC Aug 13, 2018 4:53 AM ET
**Source: Reuters Aug 13, 2018 2:01 AM GMT
***Source: Investing Aug 13, 2018 5:35 AM GMT

Upcoming Earnings Reports This Week:

  • 14/8/2018 – Home Depot, Inc. (#HD) to report pre-market
  • 15/8/2018 – Cisco Systems, Inc. (#CSCO) to report post-market
  • 16/8/2018 – Walmart Inc. (#WMT) to report pre-market
  • 16/8/2018 – Wirecard AG (#WRCDF) to report pre-market
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