1. Forex Preview: USD Higher, EUR & GBP Lower
The USD is currently trading further higher in the midst of no better alternative around than the USD. Other currencies have tumbled, each for its own set of reasons. Starting from the EUR, the common currency is trading towards its yearly low after Lagarde hinted further dovish ECB policy as future outlook. Watch for today’s inflation numbers out of the Eurozone. The GBP is also subdued but in general, standing its ground well considering the magnitude of the political storm in the UK. Safe haven currencies such as the CHF have tumbled today as risk appetite increased.
2. Risk-On Mood is Back, But is it Meant to Last?
Hints from Beijing that it will not retaliate against the latest round of tariffs from Washington and that it is in talks with the U.S. have caused market participants to hope that China is willing to be more accommodating to the U.S. and that the two-year trade war between the world’s two largest economies may finally be resolved. These hopes could be very misplaced, however, given that China said they would still come to visit the US for talks in September and “asked” the US to hold off the tariff hikes announced last Friday. Chances are that the Chinese will decide to retaliate again once the new US tariffs kick into effect this Sunday, as there seems to be zero intent on the US’s part to pause their scheduled tariff hike. In the odd chance that this does happen, it will likely cause a massive market rally on risk markets.
3. EU Bourses Edge Higher
Meanwhile, in Europe, Prime Minister Boris Johnson said he would hasten talks with Brussels for a Brexit deal. European bourses opened higher on U.S./China trade optimism and as British opposition lawmakers plan to trigger an emergency debate to prevent a no-deal Brexit.
4. Gold Dips, Oil Steady, BTC Wallows
The rather positive risk sentiment of today’s markets could keep Gold on a corrective path. XAU/USD is subdued on USD strength and risk-on but also well-positioned for the next round of tariff escalation if they happen. Oil also took a breather after three days of solid gains but is still set for its strongest week since early July, boosted by a decline in U.S inventories and a looming hurricane in Florida. Oil prices are currently lower but still stuck in range and are likely to await the next big risk move. Elsewhere, bitcoin is trading at July lows after suffering heavy losses yesterday and still in danger of dropping further if the present level does not hold as support.
You can find and trade CFDs on all of the above-mentioned assets on BDSwiss Forex/CFD platforms.
*Financial Times Aug 30, 2019 03:07 AM ET
**Reuters Aug 30, 2019 3:53 AM ET
***CNBC Aug 30, 2019 2:48 AM ET
****Investing Aug 30, 2019 05:20 AM ET