Forex Today: Trump not ready for a deal with China, Fed minutes eyed
|Here is what you need to know on Wednesday, August 21st:
- US President Donald Trump has said that he is still not ready to make a trade deal with China, cooling some optimism. Trump also said that a recession is unlikely and repeated his calls for the Federal Reserve to cut interest rates. Markets have calmed after dropping earlier.
- The Fed releases its FOMC Meeting Minutes from the late July meeting in which it cut interest rates but stressed it is only a "mid-cycle adjustment" and not the beginning of a loosening cycle. Investors will seek hints about the next meeting in September. Fed Chair Jerome Powell speaks in Jackson Hole on Friday. Mary Daly of the San Francisco Fed has expressed optimism about the US economy and said a recession is not imminent.
- The pound is holding onto its gains after German Chancellor Angela Merkel said that "practical solutions" must be found around the thorny issue of the Irish backstop. Hopes for a compromise.
- Germany will auction a 30-year bond with a 0% coupon today – testing market appetite for low yields.
- Italy: President Sergio Mattarella begins consultations to form a new government after prime minister Giuseppe Conte resigned. One option is a government between the 5-Star Movement, currently in government and the opposition Democratic Party. Another option is a general election that the other current coalition partner, La Lega, want.
- The Canadian dollar has gained some strength ahead of the inflation report and as oil prices remain stable.
- Cryptocurrencies have been declining, with Bitcoin nearing $10,000 once again.
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