British Pound Lifted by Brexit News, USD Expects EU-US Meeting
Euro and US dollar are trading mixed, as markets expect the meeting between European Commission President Jean-Claude Juncker and US President Donald Trump. During the gathering, the two leaders are expected to discuss a range of topics including trade relations, following a recent trade spat between the two regions.
In June, the US President threatened a 20% tariff on imported cars from the European Union. Last week, the EU’s Trade Commissioner Cecilia Malmstrom said in Brussels that if the US imposed these levies, it would be “very unfortunate.” In addition, the commissioner announced that the EU was preparing its own list of counter-measures.
The British pound is trading as the strongest one for today and the week, supported by Brexit news. According to a government statement, British Prime Minister Theresa May will now lead Brexit talks with the EU. Her new Brexit minister, Dominic Raab, will focus on the domestic side of leaving the bloc. May told parliament in a letter that her Cabinet Office will have "overall responsibility" for Brexit negotiations. The internal shuffle comes as May's cabinet has been in turmoil in recent weeks and the clock is ticking for Britain to strike a deal with the EU before exiting the bloc in March.
Australian Dollar is trading lower today after release of economic data. Australia CPI rose 0.4% qoq, 2.1% yoy in Q2. The annual rate accelerated from Q1’s 1.9% yoy but missed expectation of 2.2% yoy. RBA trimmed mean CPI was unchanged at 1.9%, inline with expectation. RBA weighted median CPI slowed to 1.9% yoy, down from 2.0% yoy, matched expectation.
The New Zealand dollar was also under the pressure, after extremely weak data on New Zealand's trade balance. New Zealand trade balance came in at surprised NZD -113 deficit in June, versus expectation of NZD 200m surplus. Exports dropped from NZD 5.35B to NZD 4.91B. Imports also dropped from NZD 5.15B to 5.02B.