US Dollar Gains Ground on Strong Risk Appetite

Market Reviews

The US dollar holds steady versus major currencies and stays as the strongest for the week. Australian dollar is trading as the second strongest for the week on risk appetite. The Japanese yen and Swiss franc remain the weakest ones.

Global shares show significant gains. NASDAQ grew to new record high at 7825.67 before having a strong close at 7823.92, up 1.39%. DOW rose by 0.91% at 24924.89 while S&P 500 increased by 0.87% to 2798.29. Japan’s Nikkei is up 2.0%. Hong Kong HSI rose by 0.58%, Singapore Strait Times is up 0.26%. China Shanghai SSE lags behind though and is down -0.12%.

Jerome Powell (Fed Chair) noted a strength of the US economy with unemployment at 4%. As for wages, Powell said, that annual wage growth has moved up from “low twos” five years ago, to close to three” now. And there’s been “very gradual move up”. He noted that wages should “reflect inflation plus productivity”.

President Donald Trump said in an interview with The Sun that the current Brexit strategy of Prime Minister Theresa May risks "killing" a bargain with the US. The President said that May ignored his advice on the Brexit negotiations, and instead "perhaps did the opposite."

Last week, UK Prime Minister May agreed with the ministers, who pave the way for future negotiations with the European Union. The so-called "Chequers" agreement calls for maintaining trade relations with the EU, which most closely reflect the existing relationship.

Today’s data showed, that the country's import increased by 14.1% in dollar terms in may, which is much lower than economists' forecast +20.8% and the previous value +26.0%. Meanwhile, China's exports slightly exceeded expectations (10.0%), rising 11.3% in June after rising by 12.6% in May.

In USD term, China trade surplus widened to USD 41.6B in June, up from May’s USD 24.9B and beat expectation of USD 27.2B. In CNY term, trade surplus widened to CNY 261.9B, up from May’s CNY 156.5B and beat expectation of CNY 187.0B.

Total trade with US rose 13.1% to USD 301B. Export to US rose 13.6% to USD 217.8B. Imports from US rose 11.8% to USD 84.0B. Trade surplus with US rose 13.9% to USD 133.8B. Total trade with EU rose 13.0% to USD 322.6B. Export to EU rose 11.7% to USD 191.8B. Imports from EU rose 15.0% to USD 130.8B. Trade surplus with EU grew 3.8% to USD 61.0B.