Tensions rise as the EU and US jointly expel more than 100 Russian diplomats
New daily email launch
Currency Solutions is happy to announce the launch of our new look daily email. From today we will be sending newsletter subscribers the new format which will replace our old daily newsletter format.
The new email format takes onboard feedback from our customers and provides daily updates in a more streamlined way. The three areas we will be covering are what’s been happening recently, what coming up and a table of rates for our most common currency pairs.
What’s been happening?
The pound has enjoyed a slight lift yesterday hitting fresh highs of $1.4244 against the greenback. This was largely due to the market’s expectation of an interest rate move by the BoE in May and partly due to the Dow Jones recovering over 2%. Traditionally, when the Equity markets recover the dollar takes a tumble and weakens.
Whatever you think of President Trump he is true to his word from his campaign on putting America first and now supporting the extradition of 60 Russian diplomats. The EU and the US combined have now expelled more than 100 Russian diplomats in the wake of the Russian nerve-gas attack and is being viewed as a major plus for Prime Minister Theresa May. The Russian Foreign Ministry has called the act of expulsion a “provocative gesture.”
The market now has a keen eye on important data this week from the UK and the US. On Wed out of the US we have Trade Balance and GDP figures with more of the same to follow out of the UK on Thursday.
In other currencies around the world the Aussie dollar recovered from it’s lows and reacted positively to the appreciation of the Dow Jones. As of Friday, last week the Aussie had fallen 1.8% on a number of factors including the news of the US China Trade War scenario. A trade war for such a globally exposed economy such as Australia is not good. The Aussie had been at a two year low versus the euro, a fifteen-month low versus the Japanese yen and at the lowest level since Brexit against sterling before its recovery. AUD still remains pressured in the face of copper and iron ore prices depreciating.
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What’s coming up?
RBA Assistant Governor Kent speaks later today and all eyes will be on Consumer Confidence figures out of the US this afternoon at 15:00. Fed Reserve member Bostic will speak today, and traders are expecting to hear more of a hawkish approach by Mr. Bostic in comparison to his dovish counterpart Ms Mester yesterday. When focusing on the topic of interest rates, Mester used the term “gradual increase” and pointed out the importance of not raising rates at every Fed meeting.