Markets traded in a risk-off fashion yesterday, perhaps due to headlines that the US and China struggled this week to overcome some differences, or it could be just cautiousness ahead of the outcome of this round of talks. The New Zealand dollar tumbled overnight after RBNZ’s Deputy Governor said that the Bank’s plans to increase capital requirements for banks could result in a cut to the OCR. As for today, apart from the US-China negotiations, investors may also pay attention to Canada’s retail sales data.
Risk Averse Trading ahead of Trade Talks Outcome
The dollar traded higher against all but two of the other G10 currencies on Thursday. It gained the most against the NZD, AUD and SEK in that order, while the currencies that managed to resist its strength were the safe-havens JPY and CHF.
The strengthening of the safe havens and the weakening of the commodity-linked currencies suggests a risk-averse trading environment as we enter the last day of the US-China trade talks in Washington. Indeed, most EU bourses closed in the...
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