Worries over U.S economic sanctions on Huawei and spillover effect on trade negotiations. China has communicated to retaliate against Thursdays Trump moves forward with an executive order to ban Huawei equipment from U.S networks. Breakdown in US-China communication hurt Chinese indices. Shanghai Composite index dropped 2.7% while Nikkei 225 climbed 0.9%. In theory, markets should be numb to this type of aggressive Trump tactics. However, evidence of a global slowdown has increase raising the stakes on a stable US-China trade relationship. While the supportive bias of central banks is the only thing truly keeping equity markets afloat fears of dramatically slower growth is a real mounting. Add to the mix geopolitical uncertainty of Trump hawkish rhetoric toward Iran and sending warships to the Middle East based on flimsy intel, just stinks of 2003. As Stephen Colbert stated, “worst throwback Thursday ever.” Global nervousness has built clear trends on sending EM and growth-sensitive FX lower and driving up historical safe haven currencies. Yet G10 1-month atm vol remains subdued below the 55d MA. EURUSD remains confined to a yawn-inspiring 1.11-1.1250 range. We don’t see the current news follow as a single of a structural shift, but the risk are mounting and the upside in equity looks further constricted.


Stay on top of the markets with Swissquote’s News & Analysis



This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: Under pressure below 1.1245 while consolidating Dollar's resurgence

EUR/USD dropped from 1.1260 to just above 1.1200 overnight. The markets continued to price 31bp of easing at the 31st July meeting though Fed funds futures for 2020 rose about 3bp in implied yield.


GBP/USD stabilizes around 1.2400 after the slump to 27-month low

Having plummeted to a 27-month low, GBP/USD recovers to 1.2410 during early Wednesday. British inflation numbers, political plays should be followed by fresh impulse.


USD/JPY rejected at 200-hour MA amid losses in Asian equities

USD/JPY is currently trading near 108.15, having faced rejection at the 200-hour moving average of 108.33 earlier today. The JPY is bid, possibly due to losses in equities. Also, Fitch Ratings' affirmation of Japan's rating at 'A' buoys the Yen.


UK CPI Preview: Brexit above all else

The monthly change in the consumer price index is expected to be flat in June down from 0.3% in May. The annual rate is predicted to be unchanged at 2 %. The core CPI rate is forecast to be flat in June, after gaining 0.2% in April.

Read more

Gold: Bulls are in the safe-zone, but are barely holding on

The 1400 psychological level is holding up which is just as well for the bulls, as a couple of dollars, a break of the 23.6% Fibo of the latest swing lows and highs could open up an onslaught to the downside.

Gold News