Global Themes

EUR: Euro declined as USD rallied broadly as trade tensions keep on mounting, prompting investors to buy USD for safe haven play. Again the currency is still in the recent range.

JPY: USDJPY breaking out of recent range and trading above 112.00 and strangely did not win the safe haven status that it should be. Perhaps spot is trying to break out of the downtrend channel seen since end of 2016.

GBP: Sterling dipped on global trade fears and Brexit concerns, but Sterling somehow not falling further below 1.32 because market is pricing in 62% chance of a hike in Aug.

CAD: BoC hiked as market expected spot rebounded after Poloz mentioned ongoing trade war may have impact on investment, but upgraded the economic forecast. Market still see 70% chance of a hike before end of 2018 but the effect maybe offset by recent USD move.

AUD: Rally in Aussie faded for the second day in a row on rising global trade fears, market taking risk off as AUD is a proxy for CNY too. 0.7300 is an important level before testing 0.71110/70 resistance zone.

CNH: Spot spiked as US plans to apply tariffs on another USD 200 bio worth of goods. Big word of warning by Pan Gongsheng, head of the State Administration of Foreign Exchange, that Chinese firms should increase their risk awareness and be good at using hedging tools. Clients should not take his words lightly, as this may imply trade war is more likely to bring more uncertainties.

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