Collinsonfx Daily Market Commentary

US equity markets bubbled along record levels, supported by strong economic data and economic confidence. US President Donald Trump met with Fed Chairman Jerome Powell at the White House, which Trump described as 'good and cordial'. There is no doubt that Trump would be impressing on the head of the Fed to cut interest rates, in line with major trading partners, stimulating economic growth. Powell reinforced the independence of the Fed's monetary policy. There was further speculation about the prospects of the 'Phase One US/China' trade deal, with rumours the Chinese were getting cold feet, but this conjecture, is going back and forth. The EUR traded up to 1.1080, while the GBP rallied to 1.2965, supported by the growing lead the Tories have, in the 'Brexit Election' polls.

The negative speculation over the US/China trade deal does assist the trade exposed commodity currencies. The limited upside prevented the NZD from adding to recent gains up to 0.6400, while the AUD consolidated above 0.6800. Until the US/China trade deal is signed, speculation will continue to drive market sentiment, currencies  and interest rates. A slow start to the week, with little major economic data releases, has allowed markets to take a breather.