Trade & Geopolitics Drive Currency Markets Today

Amidst a quieter calendar, trade and geopolitical headlines remain key. GBP/USD edged up to seven-week highs yesterday.

Previous Day's Market Highlights

The dollar weakened yesterday amidst renewed focus on US-China trade tensions, reversing previous gains. While the dollar has benefited from the tensions as a safe haven, it becomes vulnerable when markets focus on potential risks to the US economy.
 
Sterling-dollar edged higher above 1.31 to hit a seven-week high, helped by the weaker dollar and recent sterling strength following more positive Brexit headlines. The dollar saw additional weakness on a lower-than-expected NY Empire State Manufacturing Index. Euro-dollar briefly broke above 1.17 in overnight trading. Sterling-euro continued to trade around 1.12, which marks some of the rate’s highest levels since mid-July.
 
The IMF emphasized the importance of the UK and EU striking a Brexit deal, saying a no-deal scenario would be the costliest for the UK economy.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1238 1.1266 1.0991 2.44%
GBP/USD 1.3149 1.3171 1.2785 2.93%
EUR/USD 1.1699 1.1734 1.1492 2.06%
GBP/AUD 1.8217 1.8401 1.7417 5.35%
GBP/NZD 1.9922 2.0031 1.9167 4.31%
GBP/CAD 1.7121 1.7190 1.6596 3.46%

Today's Market Highlights

A light economic calendar today leaves market attention on the latest geopolitical and trade headlines. Shifting risk sentiment will be a key driver for the dollar and the commodity currencies. If there are no new major headlines, exchange rates could see subdued moves today, leaving them around familiar levels.
 
The calendar picks up pace tomorrow with the release of August UK CPI, US housing data, NZD GDP, and a speech from ECB President Draghi.

Today's Economic Calendar

Time Currency Release Consensus Previous
NZD Global Dairy Trade Price Index -0.7%
11:45pm NZD Current Account QoQ (Q2) $-1.050B $0.182B
2:30am AUD RBA Assist Gov Kent Speaks
3:00am JPY BoJ Interest Rate Decision -0.1% -0.1%

Caxton