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Market Review – 30/05/2020 05:27GMT
Dollar hits two-month low before recovering after Trump’s press conference on China
The greenback traded remained on the back foot as traders sold dollar broadly due to month-end position adjustment as well as risk-off trade ahead of U.S. Trump’s press conference on China while euro resumed its recent winning streak on continued market optimism over EU Commission’s recovery fund proposal, however, the greenback staged a recovery and ended the day mixed after Trump left U.S./ China trade deal untouched.
Reuters reported U.S. President Donald Trump said on Friday he was directing his administration to begin the process of eliminating special treatment for Hong Kong, in response to China’s plans to impose new security legislation in the territory. “We will take action to revoke Hong Kong’s preferential treatment,” he said, adding that the United States would also impose sanctions on individuals seen as responsible for smothering Hong Kong’s autonomy.
Trump said he was directing his administration to begin the process of eliminating policy agreements on Hong Kong, ranging from extradition treatment to export controls.
Versus the Japanese yen, dollar came under selling pressure at Asian open on overnight comments from U.S. President Donald Trump about China and penetrated last week’s 107.33 low to session lows of 107.09 ahead of European open. The pair staged a rebound to 107.31 in European morning before retreating to 107.09 again at New York open. However, the pair later erased intra-day losses and rallied to 107.89 near New York close due to month-end usd buying together with cross-selling in jpy especially vs euro.
Reuters reported President Donald Trump on Thursday said he will give a news conference on China on Friday, as his administration moves to pressure Beijing over its treatment of Hong Kong. Secretary of State Mike Pompeo told Congress on Wednesday that China has undermined Hong Kong’s autonomy so fundamentally that the Asian financial center no longer qualifies for its special status under U.S. law. Trump could take a variety of punishing measures, including imposing tariffs, limiting visas and other economic penalties.
The single currency traded with a firm bias in Asia and resumed its recent winning streak on continued optimism over EU Commission’s recovery fund proposal and gained to 1.1110 ahead of European open. Price then ratcheted higher to a two-month high of 1.1144 at New York open due partly to cross-buying of euro especially vs sterling before retreating to 1.1082 in New York on profit-taking, price last traded at 1.1098 near the close.
The British pound went through a roller-coaster ride as despite rebounding from 1.2309 at Asian open to 1.2358, price dropped to 1.2292 in European morning. However, cable erased its losses and rallied to a two-week high of 1.2394 in New York morning due to broad-based usd’s weakness but only to tumble to seeion lows of 1.2291 before moving back to 1.2359 near the close.
Data to be released this week :
New Zealand market holiday, Japan Jibun bank manufacturing PMI, China Caixin manufacturing PMI, Germany market holiday, Germany market holiday, Markit manufacturing PMI, France market holiday, Markit manufacturing PMI, Swiss market holiday, Italy Markit manufacturing PMI, EU Markit manufacturing PMI, UK Markit manufacturing PMI, Canada Markit manufacturing PMI and U.S. Markit manufacturing PMI, construction spending, ISM manufacturing PMI on Monday.
New Zealand term of trade, GDT price index, import prices, export prices, Australia RBA interest rate decision, current account, UK nationwide house price, Swiss Markit manufacturing PMI, retail sales, France budget balance and U.S. redbook on Tuesday.
Australia AIG construction index, GDP, Japan services PMI, Swiss GDP, Italy unemployment rate, Markit manufacturing PMI, Germany unemployment change, unemployment rate, UK Markit services PMI, EU producer prices, unemployment rate, U.S. MBA mortgage application, ADP national employment, labour productivity, Markit services PMI, durables ex-defense, durable goods, factory orders, durables ex-transportation, ISM non-manufacturing PMI and Canada BoC interest rate decision on Wednesday.
Australia building approvals, retail sales, trade balance, goods services imports, goods services export, Swiss CPI, EU retail sales, ECB interest rate decision, ECB deposit rate decision, UK BBA mortgage rate, U.S. international trade, good trade balance, Initial jobless claims, continued jobless claims and Canada trade balance, exports, imports on Thursday.
Australia AIG services index, UK GfK consumer sentiment, Japan all household spending, coincident index, leading indicator, Germany industrial orders, UK Halifax house prices, Italy retail sales, U.S. non-farm payrolls, private payrolls, unemployment rate, average earnings and Canada employment change, unemployment rate, Ivey PMI on Friday.