President Trump is scheduled to give a speech today at the Economic Club of New York. Traders will be very interested to see if the President gives out any clues as to how the US-China trade talks are going. This will give the President a chance to comment on reports from last week concerning the removal of some tariffs on China.
German ZEW Economic Sentiment beat expectations and came in at -2.1. This was quite an improvement as the previous number was -22.8 and the number had been forecasted to be -13.2. ZEW gauges the six-month economic outlook. A level above zero is considered optimistic, while a number below zero indicates pessimism. Adding to the positive feelings on the EUR, Reuters has reported that President Trump could announce this week that tariffs on EU autos may be delayed by six months. According to an unnamed official from the EU, this decision is all but announced, while US Commerce Secretary Ross has revealed that “good conversations” continue to occur.
Brexit party leader Nigel Farage announced that the party will not stand any candidates in the 317 Conservative-held constituencies. Farage stated his belief that the action is the best route to eliminate a second referendum from happening. Prime Minister Johnson later announced his pledge to rule out extending the Brexit transition period beyond 2020 and that he will pursue a similar trade deal with the EU that Canada has.
Despite concern over trade talks, the JPY has remained sidelined for the time being as traders choose not to enter safe haven trades. This mood could change at any moment but for now the JPY is trading lower.
US oil prices moved lower, weakening the Canadian Dollar overnight. Trade talks continue to weigh on oil prices and as a “commodity currency”, these price fluctuations affect the Canadian Dollar. Helping to push the C$ lower were reports that higher Saudi Arabian output has traders concerned about oversupply.
Trade uncertainty is back in traders’ minds while most seem cautiously optimistic about a deal eventually being completed. Trade talks seem to have “slowed” in the last week and now the markets will watch for any clues later today from President Trump.