Here is what you need to know on Wednesday, August 7th:
- Markets are stable after correcting higher on "turnaround Tuesday" but tensions are high. China has fixed USD/CNY just below 7.00, keeping the focus around its devaluation high. White House adviser Larry Kudlow said he still expects trade talks to resume in September.
- Safe-haven flows have picked up again, with the Japanese yen gaining ground and gold hitting the highest since 2013 at $1,490.
- Fed official James Bullard has said that the Federal Reserve should not respond to every move in the trade war and reduced expectations for further rate cuts. Bullard is known as a dove. His colleague Charles Evans will be speaking today.
- The New Zealand dollar has crashed by around 2% to below 0.6400 after the Reserve Bank of New Zealand shocked markets by slashing interest rates by 50 basis points to 1.00%. Governor Adrian Orr has said that uncertainty is rising around the US-Sino trade war is hurting business confidence and paralyzing activity. The move has been a huge surprise as it came after an excellent jobs report in the nation.
- AUD/USD has been dragged lower by the NZD sell-off and dropped below 0.67 – hitting the lowest in a decade. The Reserve Bank of Australia left interest rates unchanged on Tuesday but is now expected to act.
- Commodities are falling with Brent Oil entering a bear market, following the lead of iron ore.
- UK: Michael Gove, who is responsible for no-deal preparations, has blamed the EU of intransigence and reiterated that the UK is leaving on October 31st "deal or no deal." PM Boris Johnson's messages to his European counterparts have been that Theresa May's agreement must be scrapped.
- Cryptocurrencies have retreated after an attempt to move higher, with Bitcoin trading below $12,000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.