The dollar came under modest pressure on Friday, as intensifying US-China trade tensions kept a lid on recent dollar gains. The US government has demanded concrete changes to Chinese law, and for now China has vowed to retaliate. The prospect of such retaliatory measures could well be the catalyst for another leg lower for stock markets and continued risk aversion into save haven currencies.
GBP remains rudderless, as cross-party Brexit talks continue without any sign of consensus. The immediate risk for GBP is that these talks break down, sending GBPUSD back towards April’s low around 1.2860. In the interim UK employment data tomorrow could take GBPUSD out of the short term range between 1.2966 and 1.3047.
The week ahead
For the week ahead the main data releases we have are:
German ZEW (Economic Survey)
UK Unemployment figures
US Retail Sales
Canadian Inflation figures
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