Forex Today: Calm amid Trump's optimism for a deal, ahead of Corbyn's Brexit speech
|Here is what you need to know on Monday, August 19th:
- The market mood is calm and currencies are little changed after US President Donald Trump expressed optimism on reaching a deal with China. Uncertainty prevails about Huawei's licenses to operate in the US which are expiring. There have been contradicting reports on the story.
- The People's Bank of China (PBOC) has fixed the yuan stronger than last week. Together with a peaceful weekend of protests in Hong Kong, and marginally higher US bond yields, the mood is calmer.
- German finance minister Olaf Scholz has floated a number – 50€ billion of stimulus – which was used in the 2008 crisis. Europe's largest economy may be getting ready to open its purse strings after it reported a contraction in the second quarter and may see a recession.
- Brexit: A leaked government paper by the Cabinet Office has revealed that the UK may face shortages of food, medicine, and fuel. It may also struggle with three months of disruption at ports and a hard border in Ireland – and all this in a base case scenario, not a worst-case one. Opposition leader Jeremy Corbyn is set to deliver a speech later, saying he will do whatever it takes to stop a hard Brexit.
- The economic calendar is light, leaving the focus on trade and Brexit developments.
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