US Dollar Extends Losses as US Political Jitters Worsen on Fresh Trump-Russia Developments

Pound News: GBP Could Dip on Sales Data

There were no notable developments regarding UK data or the Brexit process on Wednesday, leaving the Pound to be influenced largely by movement in rivals and underlying Brexit uncertainties.

Even though some Pound rivals, like the US Dollar (USD), have weakened this week, the Pound’s recovery attempts have been limited as investors continue to fear that a potential ‘no deal’ Brexit could be disastrous for Britain’s economy.

The only notable UK dataset due for publication today will be the Confederation of British Industry’s (CBI) reports from August. A decline in sales would be Pound-negative but any potential Brexit developments are likely to be more influential.

Euro News: EUR Strength Limited as Investors Anticipate Eurozone Growth Data

While the Euro has been the currency to benefit most strongly from this week’s US Dollar (USD) weakness, the shared currency has lacked support from Eurozone news so its gains have been limited versus Sterling.

Euro investors remain concerned about the possibility of a Turkish currency crisis, and recent Eurozone data has been mixed.

Today is the biggest session this week for Eurozone data, as the Eurozone’s August PMI projections from Markit will be published and will give investors a much better idea of how the Eurozone economy has been performing this month.

US Dollar News: Trump-Russia Developments and Trade Jitters Weigh on USD

The US Dollar’s woes continued to pile up on Wednesday with this week’s concerns about the independence of the Federal Reserve being joined by fresh political worries.

On Tuesday night, two of US President Donald Trump’s ex-allies faced criminal convictions amid the ongoing Trump-Russia investigation from US Special Counsel Robert Mueller. The ensuing speculation about Trump’s political position exacerbated the US Dollar selloff.

US Dollar investors are likely to focus on last night’s Federal Reserve meeting minutes for most of today, but upcoming US PMI projections from Markit and of course potential political developments could have an impact too.

Canadian Dollar News: GBP/CAD Tests Fortnight Highs Amid Underwhelming Canadian Data

The Canadian Dollar’s recent strong streak has seemingly come to an end this week, as a few underwhelming Canadian datasets were enough to help even the weak Pound advance against the ‘Loonie’.

Tuesday’s news that Canadian wholesale sales had unexpectedly contracted -0.8% was followed by underwhelming Canadian retail sales on Wednesday. Growth in Canadian retail sales was forecast to slow to 0.1% month-on-month, but unexpectedly contracted -0.2%.

No notable Canadian data will be published for the remainder of the week, so the Canadian Dollar is likely to be influenced by potential developments in US trade protectionism or NAFTA renegotiations.

Australian Dollar News: US-China Trade Talk Uncertainties Keep Pressure on AUD

Despite some solid Australian data this week and speculation that US-China trade tensions could soften, the Pound to Australian Dollar exchange rate has seen solid gains so far.

GBP/AUD hit its best levels in a week on Wednesday afternoon. US President Donald Trump downplayed the chances of improving US-China trade relations despite upcoming talks, which made the Australian Dollar unappealing.

No more notable Australian data is due for publication this week, so Australian Dollar investors are likely to react to US trade developments. Potential comments regarding monetary policy from Reserve Bank of Australia (RBA) officials could prove influential too.

 

Upcoming Data

Thursday, 23rd August

07:45    French Business Confidence

08:00    French PMI Projections

08:30    German PMI Projections

09:00    Eurozone PMI Projections

11:00    UK CBI Distributive Trades

12:30    ECB Monetary Policy Meeting Accounts

13:30    US Jobless Claims

14:45    US PMI Projections

15:00    Eurozone Consumer Confidence

15:00    US New Home Sales

Tom Taylor

FX Manager

[email protected]