Forex news for Americas trading on August 23, 2019:
- China to levy retaliatory tariffs on another $75 billion of US goods
- Trump announces fresh tariffs on Chinese products, ramping up rates by 5%
- Trump says American companies 'ordered' to immediately start looking for China alternatives
- Trump ponders whether Fed Chairman Powell is 'enemy', hints at pending announcement
- Fed's Powell: 'We will act as appropriate to sustain the expansion'
- Fed's Clarida: The global outlook has worsened since July meeting
- Trump considering 25% tariffs on all Chinese goods - report
- BOE's Carney says UK economy is operating just below potential
- Canada June retail sales 0.0% vs -0.3% expected
- US new home sales for July 635K versus 647K estimate
- Fed's Harker: Right now we are where we want to be
- Fed's Mester: We might need to recalibrate policy if uncertainty continues
- Belgian August business sentiment -5.8 vs -5.0 prior
- Billionaire David Koch dies at 79
- Fed's Mester: I'm particularly focused on US consumers
- Fed Kaplan: So long as the US consumer is strong, the economy will stay strong
- Baker Hughes US oil rig count 754 vs 770 prior
- German government sees recession but doesn't see need for short-term stimulus
- Global Times editor: Without China US farm goods have nowhere to go
- Boris Johnson: Persuading EU to change stance to 'take some time'
- CFTC commitment of traders: Little changes in speculative positions this week
Markets:
- S&P 500 down 76 points to 2847
- WTI crude down $1.42 to $53.93
- Gold up $28 to $1526
- US 10-year yields down 8 bps to 1.53%
- JPY leads, USD lags
It was one for the history books.
It started just as New York traders were ramping up for the day. That's when China announced retaliatory tariffs. The market took that in stride for the most part. Stock futures dipped and so did yen crosses but it was modest.
That was partly due to apprehension about making any moves before Powell. When the Fed speech came out it was a bit of a dud but he didn't repeat 'mid-cycle adjustment' and noted that risks were higher so that was dovish enough and risk trades did a bit better while the dollar sagged.
But it really kicked off shortly afterwards when Trump tweeted calling Powell an enemy but in that same tweet he hinted at an announcement of some kind. The market didn't pick up on that part initially but it did later when he explicitly said an announcement was coming on China.
That sparked a rout in risk trades and the dollar. It was a deep blow for yen crosses with some breaking the range lows including EUR/JPY and NZD/JPY. USD/JPY fell 120 pips to 105.25 which was the lowest since Aug 12 and only narrowly above the Aug lows.
Cable gave back some of yesterday's rally early but used the weak dollar to turn the day around and finish near the highs of the week at 1.2280.
USD/CAD fell even with oil prices lower. The pair finished at the lows of the day at 1.3274 after hitting 1.3320 early. The Canadian retail sales report was very strong and it's going to leave the BOC with little choice but to wait and see on rates.
With the final Trump announcement on tariffs coming after markets were closed, we're sure to have a lively open Monday. See you then.
