Market Roundup
• Dollar, stock markets slide
• Trump orders U.S. companies to look at closing China operations
• Powell says Fed will “act as appropriate
• Canada Jun Core Retail Sales (MoM) 0.9%,-0.1% forecast,-0.4% previous
• Canada Corporate Profits (QoQ) 5.2%,-0.3% previous
• Canada Jun Retail Sales (MoM) 0.0%,-0.1% forecast,-0.2% previous
• US Jul New Home Sales (MoM) -12.8%,-0.2% forecast,20.9% previous
• US Jul New Home Sales -635K,649K forecast,728K previous
• Brazil Jul CAGED Net Payroll Jobs 45.70K forecast, 48.44K previous
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• No Events Ahead
Currency Summaries
EUR/USD:The euro gained against dollar on Friday, as investors scaled back expectations for aggressive U.S. rate cuts. Two Federal Reserve officials said on Thursday they saw no reason to cut rates without new economic deterioration, a day after Fed meeting minutes showed policymakers disagreed on the rate cut last month. The Fed is caught between discord within the U.S. central bank over appropriate monetary policy and mounting outside pressure for more interest rate cuts. The euro was up 0.53 % at $1.1137. The dollar, measured against a basket of currencies, fell 0.66% to 97.58.Immediate resistance can be seen at 1.1147 (Daily High), an upside break can trigger rise towards 1.1208 (50 DMA).On the downside, immediate support is seen at 1.1113 (9 DMA), a break below could take the pair towards 1.1050 (Daily Low).
GBP/USD: The pound strengthened against dollar on Friday, after Federal Reserve Chair Jerome Powell set the stage for further interest rate cuts, leaning away from earlier comments by other Fed officials who said further easing was not necessary for now. Markets were divided on what they thought Powell would say at the Jackson Hole, Wyoming, symposium. Some expected he would announce a major stimulus measure to ease a deteriorating global economic outlook, while others believed he would downplay the chances of a September rate cut even though that has been fully priced in by investors. In his speech on Friday, Powell straddled the middle of both views, giving few clues as to what is to happen next at the September policy meeting. Powell said the U.S. economy is in a "favorable place" and the Fed will "act as appropriate" to keep the current economic expansion on track.. The pound was up 0.28% at $1.2284. Immediate resistance can be seen at 1.2287 (21 DMA), an upside break can trigger rise towards 1.2391 (50 DMA).On the downside, immediate support is seen at 1.2148 (21 DMA), a break below could take the pair towards 1.2100 (Psychological level).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Friday. as this week's stronger-than-expected domestic data was offset by reduced investor appetite for risk.U.S. stocks plunged in a broad sell-off as China and the United States traded their latest salvos in a prolonged trade war. Canada exports many commodities, including oil, so its economy could be hurt by a slowdown in the flow of global trade. Data this week showed Canada retail sales in June and inflation in July both beat expectations. .The Canadian dollar was last trading 0.4% higher at 1.3292 to the greenback. The Canadian dollar was trading nearly unchanged at 1.3296 to the greenback. The currency was down 0.2% for the week. Immediate resistance can be seen at 1.3356(Higher Bollinger Band), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3248 (21 DMA), a break below could take the pair towards 1.3178 (50 DMA).
USD/JPY: The U.S. dollar declined against the yen on Friday, after President Donald Trump ordered U.S. companies to start looking for an alternative to China after Beijing imposed more tariffs on American goods, further escalating tension between the world's two largest economies in a prolonged trade dispute. That triggered mass selling in the dollar, which fell from a three-week high against the euro and to one-week troughs versus the yen and Swiss franc. The dollar down 0.96% against the yen to 105.39 yen Strong resistance can be seen at 106.73 (21 DMA), an upside break can trigger rise towards 107.43 (50 DMA).On the downside, immediate support is seen at 105.23 (Daily Low), a break below could take the pair towards 105.00 (Psychological level).
Equities Recap
All major European stock bourses turned negative and trade-sensitive stocks slid sharply on Friday after China announced plans to slap import tariffs on more U.S. goods, escalating the protracted spat between the world’s top two economies.
The UK's benchmark FTSE 100 closed down by 0.47 percent, Germany's Dax ended down by 1.15 percent, and France’s CAC finished the down by 1.14 percent.
Wall Street tumbled on Friday after the U.S.-China trade war escalated in dramatic fashion, with President Donald Trump demanding that American companies seek alternatives to doing business with China after Beijing announced its own slate of retaliatory measures.
Dow Jones closed down by 2.37 percent, S&P 500 ended down 2.59 percent, Nasdaq finished the day down by 3.00 percent.
Treasuries Recap
Benchmark U.S. Treasury yields fell to their lowest levels in a week on Friday as an escalation in the U.S.-China trade war raised concerns about an economic downturn.
The two-year, 10-year yield curve inverted last week for the first time since 2007, a signal that a recession is likely in one to two years.
Commodities Recap
Gold surged 2% on Friday as investors interpreted U.S. Federal Reserve Chair Jerome Powell’s speech as leaning toward a dovish monetary policy stance and President Donald Trump’s latest comments exacerbated trade tensions with China.
Spot gold rose 1.9% at $1,526.60 an ounce by 14:08 pm EDT (1801 GMT), shaking off slight headwinds ahead of the Fed Chair’s speech.Prices earlier rose to $1,528.79, the highest since Aug. 13, when spot gold had scaled a six-year peak of $1,534.31.U.S. gold futures settled up 1.9% to $1,537.60.
Oil prices fell on Friday after China unveiled retaliatory tariffs against about $75 billion worth of U.S. goods including crude oil, another escalation of a protracted trade dispute between the world’s two largest economies.
Brent crude futures fell 58 cents, or 1%, to settle at $59.34 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.18, or 2.1%, to settle at $54.17 a barrel.WTI lost 1.3% for the week, while Brent rose 1.2% during the week.
