Forex Today: Upbeat mood as China halts yuan decline, Saudis want to halt oil slide
|Here is what you need to know on Thursday, August 8th:
- The market mood has been improving after China fixed its yuan above 7.00 for USD/CNY – but stronger than expected for the Chinese currency – restraining market forces. China's trade balance surplus beat expectations with a significant rise in exports – perhaps a preparation for new tariffs.
- USD/JPY has stabilized above 106, and commodity currencies are rising. US 10-yields are have stabilized above 1.70% after dipping below 1.60% on Wednesday.
- Fed official Charles Evans has said that economic headwinds mean cutting rates further could be reasonable. He is a known dove. President Donald Trump has repeated his calls for the Fed to do more.
- New Zealand: RBNZ Governor Adrian Orr repeated his stance that interest rates may turn negative.
- Australia: After the RBA left the interest rate unchanged, the focus shifts to a speech by Governor Phillip Lowe and the release of the bank's Statement of Monetary Policy (SOMP) early on Friday where further monetary stimulus may be hinted at.
- UK politics: Foreign Secretary Dominic Raab said the EU's stance makes reaching a deal hard. His words continue the blame game around Brexit.
- Italy: Interior Minister Matteo Salvini threatens to abandon the coalition government and trigger new elections in the euro zone's third-largest economy. He also aims to break the EU's budget rules.
- Oil prices have found some support after Saudi officials have reportedly called other oil-producing countries and suggested options to halt the drop in prices that was part of this week's sell-off.
- Gold is holding its ground around $1,500, the highest since 2013.
- Cryptocurrencies are consolidating with Bitcoin hovering below $12,000.
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