The much-rumoured trade deal between the UK and the USA, was confirmed by President Trump, boosting market confidence in the Trump approach to tariffs and trade. The deal is the first major trade deal, between the USA and a large economy, since the tariff war began. This is what markets had been counting on and it led to gains in equities and the US Dollar. The EUR fell back to 1.1300, while the GBP traded 1.3340, rising on the back of a renewal of rate cuts from the Bank of England. European economic data is on the improve, with German Factory Orders and Industrial Production, showing positive gains.
The stronger reserve sent the AUD back to 0.6400, while the NZD struggled to hold 0.5900. The good news surrounding the trade agreement between the US and the UK, is very positive for trade dependent, commodity countries. These trade deals need to be forthcoming and include larger Asian Countries. This will only add to existing pressures on China, who need to seek a deal, with the USA.
