FX Talking: Turning the screw
Buoyed by a strong domestic economy and a stock market inflated by repatriated corporate profits, the White House continues to look for concessions from major trading partners. We see no let-up in this protectionism ahead of November US mid-term elections, spelling trouble for pro-cyclical currencies
Executive summary
The US economy continues to grow near 4%, US equities continue to perform well, and the Federal Reserve looks on course to hike in both September and December. Expect President Trump to continue to use this window of US out-performance to pressure China into trade concessions. Expect the $/EM complex
This environment should see EUR/USD remain under pressure
Within Europe uncertainty reigns. The market is increasingly wary of a ‘no-deal’ Brexit, but we think this is unlikely and that GBP could again enjoy a short squeeze into
see good stories in the likes of the PLN and the CZK.
And
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