NY Open: Trade fears flare as China strikes back NY Open: Trade fears flare as China strikes back NY Open: Trade fears flare as China strikes back

NY Open: Trade fears flare as China strikes back

Michael O’Neill

FX Trader, Loonieviews.net

Trade fears flared in early New York trading as China said it would levy tariffs on $16.0 billion of US imports, matching the amount and timing of the US tariffs set to take effect on August 23. The impact of the news on FX markets was minimal, but Wall Street opened on a sour note. Well, maybe not sour but certainly a little 'off', since the major indices' declines barely broke double digits.

There weren’t any US data of note this morning. Richmond Federal Reserve president Thomas Barkin said the economy was strong enough for further rate increases, which is nothing new and thus the comment was ignored.

Oil prices fell with China trade data suggesting reduced crude imports blamed for the drop. WTI dropped from $69.30/barrel just before New York opened to $67.84/b by mid-morning.

EURUSD is stuck in a 1.1530-1.1630 range with demand for EURGBP and sales of EURJPY a key reason for the narrow band and lack of direction. USDJPY, meanwhile, is torn between risk aversion demand and the outlook for higher rates. A typhoon approaching Tokyo is expected to disrupt the morning rush hour and may put a damper on trading activity in Asia.

USDCAD soared to 1.3120 after June Building Permits were far weaker than forecast (actual -2.3% versus a forecast of 1.0%). The move was quickly reversed, and prices regrouped at 1.3050 support. There is speculation that the Saudi Arabia/Canada diplomatic row is behind the Canadian dollar weakness; it is rumoured that the Saudis sold Canadian assets and Canadian dollars yesterday with fears of more selling to come.

GBPUSD is a basket case. Government officials opining about the perils of a “no-deal” Brexit combined with the downgrading of UK rate hike expectations and bearish technicals have driven GBPUSD through key support at 1.3020 and 1.2910. If 1.2840 breaks, there isn’t a lot of support until 1.2600.

Source: Saxo Bank


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992