Forex Today: trade war overshadows it all
Here is what you need to know on Monday, August 26rd:
- TRADE WAR: Following China’s announcement on tariffs on US goods early Friday, US President Trump struck back. After the market closed, the US announced that starting on October 1st, the $250B of goods coming from China currently being taxed at 25%, will be taxed at 30%, while the remaining $300B of goods will now be taxed at 15% starting September 1st.
- BREXIT: Weekend headlines related to the future of a trade deal showed crossed accusations on whether who will be responsible for a no-deal Brexit. EU Council President, Donald Tusk, said that the Union is willing to help the UK, although not in the case of a no-deal. UK PM Boris Johnson responded that if the EU “don’t want a no-deal Brexit, then we’ve got to get rid of the backstop from the treaty.” Meanwhile, news indicated that PM Johnson had asked the UK’s attorney general, whether Parliament could be shut down for five weeks, to prevent MPs forcing a further extension to Brexit.
- Major pairs set to open with gaps, as none of the above-mentioned headlines were priced in.
- Safe-havens soared, with the Yen and Gold likely to extend their rallies.
-Crude oil prices fell, as mounting tensions between the US and China would likely lead to decreasing demand.
-Cryptocurrencies at a brink of turning bearish. However, the ongoing risk-averse environment could give them a boost this week.