Reservations remain over the latest rendition of the US/China Trade Agreement. Trump announced it was a ‘done deal’ and that China would pay tariffs of 55%, while the US would pay only 10%. This was not signed off in China by President Xi, so nagging doubts remain. US PPI was softer than expected, further ignited tensions between Federal Reserve’s Chairman Powell and US President Trump. Trump called Powell a ‘numbskull’ for not cutting rates, as inflation tumbles, while pressure on Powell builds. Powell met with Trump recently and rumours have been doing the rounds, that Powell would be resigning anytime. The US Dollar weakness continued, with the EUR surging to 1.1600, while the GBP looked to regain 1.3600. UK GDP numbers turned negative, in the latest reading, while the British trade deficit continues to expand.
The weaker reserve allowed the AUD to consolidate above 0.6500, while the NZD look to push 0.6050. NZ and Australia remain extremely vulnerable to the ill-effects of tariffs, while no trade deals are in place, and the US is pushing back against these Countries political and economic antics.
