Attention once again turns to China for market data as trade wars heat up.

The EUR/USD continues to hover around the $1.16 mark. The pair opened at $1.15969 and steadily climbed in early trading until it reached a high of $1.16275 mid-session. It could not hold onto those highs as it slid over the following few hours to hit a low of $1.15722. The good news for euro-buyers is that it recovered from that low, climbing once again and regaining most of those losses. It is currently trading at $1.16107. The pound was hammered yesterday, on the back of uncertainty surrounding Brexit. The GBP/USD opened at $1.29358 and showed promise early as it reached a high of $1.29591. At that point however, that’s when the pair began its tumble down. Over the next few hours, the pair dropped to a low of $1.28519. There was no great recovery for the pound, although it is off its lows, currently trading at $1.28813.

The Dow had a reversal of fortunes, on the back of China announcing more tariffs on US goods. The Dow opened at 25,638.94 and peaked at 25,662.01 reasonably early in the session. It then fell slightly and remained flat until news came out regarding the tariffs. The Dow pulled back further and then tumbled sharply towards the end of the US trading day. It hit a low of 25,529.09 during the last hour of trade. It is currently not far off those lows at the moment. The Dax looked set for a promising session, but was eventually weighed down by the Dow. The German index opened at 12,652.97 and fell to an early low of 12,586.10. It quickly recovered and then surged to a high of 12,706.70. However, the weight of underperforming US indices dragged the Dax back down and it closed at 12,615.70.

The day ahead again features China as they release important CPI data. China has also introduced further tariffs on US goods, which is an escalation of trade tensions between the world’s two largest economies. China has placed 25% tariffs on $16 billion worth of US goods. Now markets await to see if there is any retaliation from the US or indeed further tariffs announced by China. Other data set for release today includes:

China – PPI

Canada – Housing Starts, NHPI

NZ – Business NZ Manufacturing Index

Europe – Swiss Unemployment Rate, ECB Economic Bulletin

Japan – Prelim Machine Tool Orders, PPI, Prelim GDP & GDP Price Index

US – PPI & Core PPI, Unemployment Claims, Final Wholesale Inventories, Natural Gas Storage

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