Dollar Flat; GDP Slows; British Parliament Suspended
AUGUST 29, 2019
With the exception of a few pairs, the dollar was mostly flat overnight. Nevertheless, the Bloomberg Dollar Index remains near the highest levels since December.
EUR/USD is flat following poor German consumer inflation and slightly better French GDP.
The New Zealand dollar slipped again on an industry report showed business confidence worsened.
This morning’s economic docket confirmed solid growth in the world’s largest economy but also included warning signs that the trade war may be leading to a slowdown. The second reading of Q2 GDP registered at 2.0%, slightly lower the initial 2.1%. Pending home sales will cross the wire at 10 a.m.
What to Watch Today…
- Pending Home Sales at 10 a.m.
Complete Economic Calendar can be found here.
The safe-haven Japanese yen lost nearly a percent against the U.S. overnight after China said it would not immediately retaliate against the U.S. tariffs that are slated to kick in this weekend. China’s Ministry of Commerce spokesman held a more reconciliatory tone and said: “The question that should be discussed now is about removing new tariffs to prevent escalation.” Expect the yen move to reverse quickly if China changes direction or President Trump doubles down.
The British pound steadied a bit overnight after falling the day prior on news that Prime Minister Boris Johnson would suspend parliament. The move essentially moves the deadline for Parliament to come up with a plan from October 31st up to September 12th. Johnson’s goal is to remove roadblocks or delays to the October 31st deadline to leave the EU. However, his opponents argue his move could cause social unrest or even a constitutional crisis. Despite the gloomy headlines, the sterling remains well above the lows from earlier this month.