Yesterday, the US-China talks ended with no material progress, just after tariffs on USD 16bn worth of products from each nation kicked in. The pound slid on the back of a strong dollar, but also on renewed concerns over a no-deal Brexit. As for today, focus is likely to fall on Powell’s speech at Jackson Hole.
US-China Talks End, Powell Takes Center Stage
The dollar continued to recover against all but two of the other G10 currencies on Thursday. It gained the most against JPY, SEK and NZD in that order, while it traded virtually unchanged versus EUR and NOK. The Aussie, although it still ended the day lower against its US counterpart, rebounded overnight after PM Turnbull was ousted and replaced by Scot Morrison.
Yesterday, the talks between the US China ended with no breakthrough after tariffs on USD 16bn worth of products from each nation kicked in. On Tuesday, we said that this could hurt risk sentiment somewhat. Indeed, although not clearly evident in the currency market (USD strengthened but JPY lost the most ground), major European and US indices ended their sessions in the red.
However, we also noted that bearing in mind last Friday’s reports that the two nations are working on a road map that would eventually lead to a meeting between
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