The effects of the trade talks seem to be becoming a very repetitive cycle of events. Once again trade tensions wiped millions off the values of stocks yesterday as there appears to be little change from the current situation, with neither the US or China looking to break the deadlock.

Currency Pair% Change (Week)Difference on £200,000

The US dollar on this occasion wasn’t the major winner with gold becoming the place that investors looked to store funds. The Organisation for Economic Cooperation and Development warned yesterday that the trade war could wipe off 0.7% from global growth by 2021 which equates to around $600bn. From the United States perspective, the uncertainty may just continue to mount and may explain why investors are getting nervous. If Brexit does go ahead the US will be in trade talks with the UK, EU and China without clear paths and end dates in place, there is no doubt that this will take its toll on business sentiment further down the line and could have a negative effect on the dollar.

The US dollar normally does very well in times of uncertainty due to its haven status. This is since the US dollar is considered the global currency and there are so many different factors that influence the value of the currency, often the currency remains steady. However, in the last week we have seen a major movement against sterling and should the UK get things in order this position could very quickly unravel. Evidently this does appear to be unlikely from the UK’s perspective with the speculation surrounding Theresa May's position soon to revealed.

Flood of US Economic Data This Week

US data today

Just after lunchtime today the latest Durable Goods Orders figures will be released and is expected to show a sharp deduction from previous months. This was predicted to be the case as inventories in the past few months have been at highs, so a snapback in these figures has been coming according to analysts.

Furthermore, the second release of the Nondefense Capital Goods Orders will be released, and this is also expected to be down from the previous month. This is a new data release and looks at goods orders excluding the military and aircraft. Arguably this provides a better indication into the business trends as quite often defence and aircraft are large purchases, manipulating the real data. Today the volatility could well continue with any developments from Donald Trump or Theresa May both potentially causing major market movements.


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