Welcome to Saxo Bank Hong Kong

Please select your language
Forex 4 minutes to read

FX dancing to the tweets of the president

Michael O’Neill

FX Trader, Loonieviews.net

Summary:  President Trump tweeted up a storm and not just literally. His China-baiting tirade sent FX traders scurrying for cover and put safe havens back into fashion. Equities took it all in their stride, having lost big-time yesterday.


The G10 major currencies were attempting a mild recovery after yesterday’s risk aversion retreat. EUR, GBP and JPY were off their overnight lows and looked like they were set to break higher. Then Trump began sharing his thoughts. 

He boasted that steel tariffs had rebuilt the US steel industry in just one year. Then he started in on China, tweeting “China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position.” He said about the trade talks, “the last time were close they wanted to renegotiate the deal. No way.” Then he adopted a somewhat conciliatory tack saying “When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense.”

After that tirade, safe-haven trades were back in vogue. USDJPY dropped from 109.74 to 109.25, EURUSD dove from 1.1237 to 1.1206 and GBPUSD fell from 1.2960 to 1.2915. The commodity bloc currencies were also sold. It wasn’t all Trump. Traders were nervous over rising tensions in the Middle East sparked by reports of explosive-laden drones attacking Saudi Aramco pumping stations. 

Wall Street traders seem to be taking Trump’s latest tweet storm with a grain of salt. Or else, they figured they did enough panic selling yesterday to cover them today. The DJIA, S&P 500 and Nasdaq are up 0.52%, 0.59%, and 0.65% respectively as of 14:00 GMT but they still have a long way to climb to recoup yesterday’s losses. There is not any actionable top tier economic data today which suggests the early trading gains may not be sustained.
Chart: GBPUSD 30-minute. Source: Saxo Bank
Disclaimer

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 is not intended to and does not change or expand on this. 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-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK Limited
Rooms 2001-02, 20/F York House
The Landmark
15 Queen's Road Central
Hong Kong

Hong Kong

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: Rooms 2001-02, 20/F York House, The Landmark, 15 Queen's Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.