Asia Pacific Trading Session Economic Calendar
Markets

US Dollar May Rise as Trump, Junker Dial Down Trade War

DailyFX.com -

TALKING POINTS - TRUMP, JUNKER, TARIFFS, US DOLLAR, EURO, YEN

  • US Dollar may rise as Trump, Junker reach deal on auto import tariffs
  • Japanese Yen at risk as easing trade war worries bolster risk appetite
  • Australian Dollar lower as soft CPI data weighs on RBA rates outlook

A dull offering of European and US economic data is likely to see currency markets focused on a meeting between Donald Trump and Jean-Claude Junker . The European Commission president arrives stateside on a mission to dissuade the White House from moving forward with an increase in tariffs on auto imports. Motor vehicles are a leading export commodity and the US is the biggest overseas market for the EU.

US Department of Commerce hearings revealed the duties are deeply unpopular domestically last week. That is hardly surprising: the US auto industry's supply and production chains extend beyond national borders so the tariffs would hurt domestic producers alongside foreign ones. Upsetting a key constituency before midterm elections seems unwise, so Mr Trump is probably keen to scrap the duties.

Still, he will want to extract the maximum price for a concession from the visiting EU delegation. This might well explain the show of strength intended in last w eek's jawboning lower of the US Dollar . For his part, the wily Mr Junker no doubt understands the US President's desire to cast himself as a shrewd deal-maker and his appreciation for a splashy photo op.

On balance, that seems to set the stage for a compromise. Such a result is likely to weigh on the anti-risk Japanese Yen easing trade war tensions buoy investors' spirits. It may likewise pave the way higher for the US Dollar as the threat of competitive devaluation is dialed down. The Euro may struggle to capitalize however, with investors opting against directional commitment before the upcoming ECB rate decision .

The Australian Dollar underperformed in otherwise quiet Asia Pacific trade. The currency lost ground against all of its G10 FX counterparts after second-quarter CPI data fell short of forecasts , putting the on-year inflation rate at 2.1 percent. The move tracked a parallel drop in local bond yields, suggesting the report cooled RBA interest rate hike bets.

See our free guide to learn how t o use economic news in your trading strategy !

ASIA PACIFIC TRADING SESSION

Asia Pacific Trading Session Economic Calendar

EUROPEAN TRADING SESSION

European Trading Session Economic Calendar

** All times listed in GMT . See the full economic calendar here .

FX TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

original source

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

Learn forex trading with a free practice account and trading charts from IG .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx