US stocks and the dollar both lost ground yesterday after US President Trump criticised Fed Chair Jerome Powell. Read more about that and other news here.
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Wall Street and USD Slide After Trump Attacks Fed Chair
FOREX NEWS & BLOG
US Presi. Trump: Big news conference Thursday morning concerning a major trade deal
US President Donald Trump announced during the Asian trading hours on Thursday of “a big news conference (Thursday) tomorrow morning at 10:00 a.m. (14 GMT) in the Oval Office. concerning a major trade deal with representatives of a big, and highly respected, country.”
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PBOC sets USD/ CNY mid-point today at 7.2073 (vs. estimate at 7.2385)
The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.
Previous close was 7.2250
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PBOC injects 158.6bn yuan via 7-day RR, sets rate at 1.4%
- zero mature today
- net injection is 158.6bn yuan
This article was written by Eamonn Sheridan at www.forexlive.com.
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New York Times says Trump will announce a trade deal with the UK
Here’s Trump’s announcement post:
The New York Times says now it’ll be with the UK.
- The U.S. and Britain have been in talks over lowering British tariffs on American cars and agricultural products, as well as removing UK digital taxes on U.S. tech firms. It remains unclear whether the deal is finalized or if it represents a framework for continued negotiations.
Unlike other countries, Britain was not hit with additional “reciprocal” tariffs due to its trade surplus with the U.S., though it remains subject to a 10% global tariff and a 25% levy on steel, aluminum, and cars.
The UK was my pick. But … I don’t know about anyone else but I’ve lost count of how many times the NYT has been wrong about what to expect from Trump.
This article was written by Eamonn Sheridan at www.forexlive.com.
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AUD/USD advances to near 0.6450, upside appears limited due to Fed cautious tone
The AUD/USD pair edges higher in Thursday’s Asian session, trading around 0.6440 after falling over 1% in the previous session. The pair had previously touched a five-month high of 0.6514 on Wednesday, but retreated amid Federal Reserve’s (Fed) cautious policy outlook.
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BoJ Ueda: Mindful of impact of rising food prices on underlying inflation
Bank of Japan Governor Ueda is answering questions in parliament:
- Uncertainties over rice and other food prices remain high, but prices likely to settle down eventually
- Mindful of impact of rising food prices on underlying inflation
- Will closely monitor price situations as uncertainties over global economy remain high
Earlier:
- BoJ minutes: Bank will raise rates if economic and price projections realised
- Former BOJ Governor Kuroda supports Ueda’s normalization steps
This article was written by Eamonn Sheridan at www.forexlive.com.
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Pavlov’s dog takes US equities higher on Trump’s “major trade deal” teaser announcement
Trump’s announcement:
As expected, markets react by bidding up stocks. This is Globex S&P 500 (it’s a CFD that tracks ES):
Overnight trade is thinner than in regular trading hours, so don’t go betting the farm, OK?
This article was written by Eamonn Sheridan at www.forexlive.com.
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New Zealand PM Luxon: Remains confident about NZ economic recovery
New Zealand’s Prime Minister Christopher Luxon crossed the wires in the last hour, saying that the sharp deterioration of financial markets in early April has somewhat recovered, but markets remain volatile.
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PBOC sets USD/CNY reference rate at 7.2073 vs. 7.2005 previous
On Thursday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.2073 as compared to the previous day’s fix of 7.2005 and 7.2385 Reuters estimate.
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PBOC is expected to set the USD/CNY reference rate at 7.2385 – Reuters estimate
People’s Bank of China USD/CNY reference rate is due around 0115 GMT.
The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.
How the process works:
- Daily midpoint setting: Each morning, the PBOC sets a midpoint for the yuan against a basket of currencies, primarily the US dollar. The central bank takes into account factors such as market supply and demand, economic indicators, and international currency market fluctuations. The midpoint serves as a reference point for that day’s trading.
- The trading band: The PBOC allows the yuan to move within a specified range around the midpoint. The trading band is set at +/- 2%, meaning the yuan could appreciate or depreciate by a maximum of 2% from the midpoint during a single trading day. This range is subject to change by the PBOC based on economic conditions and policy objectives.
- Intervention: If the yuan’s value approaches the limit of the trading band or experiences excessive volatility, the PBOC may intervene in the foreign exchange market by buying or selling the yuan to stabilize its value. This helps maintain a controlled and gradual adjustment of the currency’s value.
This article was written by Eamonn Sheridan at www.forexlive.com.
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Barclays says US equities upside difficult. Cites downgrades, recession, erratic policy.
Barclays is warning that the U.S. economy remains on course for a recession, with the likelihood increasing as global trade tensions continue to simmer without resolution. In a note to clients, the bank said that persistent uncertainty around U.S. trade negotiations is weighing on business confidence and investment decisions, potentially tipping the economy into contraction.
- “The longer uncertainty persists without any concrete progress on deals, the higher recession risk is, in our view, and we haven’t seen full capitulation,” Barclays analysts wrote.
While the bank continues to view a mild recession as the most probable scenario, it noted that such an outcome is “still avoidable if the trade war de-escalates quickly enough to prevent it.”
Barclays also flagged concerns over equity valuations, suggesting that further upside in stock prices is becoming increasingly difficult to justify. The bank cited downgrades in corporate earnings forecasts and what it described as “erratic” Trump policy execution as key headwinds.
This article was written by Eamonn Sheridan at www.forexlive.com.
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NZD/USD retreats as Fed signals caution and Kiwi struggles on mixed jobs data
The NZD/USD pair is pulling back from a six-month high near 0.6025 reached earlier on Wednesday, trading around 0.6000 as investors react to the Federal Reserve’s (Fed) cautious policy tone and mixed economic data from New Zealand.
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