Tensions between the two trading partners bubble away as political problems surface.

The EURUSD opened at $1.13348 and endured a bumpy session before falling back to a. The pair climbed to $1.13519, then fell to lows of $1.13193 mid-session. The euro then climbed to near-session highs of $1.13629 before falling to near-session lows of $1.13213 a short time later. The euro had one more rally in it, as it climbed to a high of $1.13657 before falling back to $1.13221. It is currently trading at $1.13338. The GBPUSD opened the day at $1.30474 and remained quite flat early, hitting a low of $1.30249. It spent mid-session climbing, where it eventually peaked at $1.30945. It could not hold onto those highs and retreated for the rest of the session. It is currently trading at $1.30302. The AUDUSD tumbled overnight as tensions between China and Australia escalating. The pair opened at 0.71623 and climbed to a high 0.72060 as better-than-expected jobs data was released. Those gains were quickly given up as the AUD retraced to 0.71653. As news broke that China had banned Australian coal, the AUD began its decline, falling to 0.70845, remaining steady for a few hours before falling again to a low of 0.70690. It is currently trading at 0.70943.

The Dow looked set for another strong session after opening at 25,969.23. The index rallied to an early high of 26,091.65 before the rot set in. It began a gradual decline over the rest of the trading day before a sharp drop late saw the Dow hit lows of 25,760.04. It has come off those lows and is currently trading at 25,837.41. The Dax opened with a pop, jumping to an opening-hour high of 11,482.03. It quickly came off those highs and declined for the remainder of the session, hitting a closing-hour low of 11,386.21 before closing at 11,410.25.

The day ahead looks set to be a relatively quiet day ahead, Friday’s are notorious for volatility. It will be interesting to see what the next step is between China and Australia as relations worsen. Australia has banned one of its telecommunications companies from building some infrastructure, which could mean that the Chinese ban of Australian coal is in retaliation to that. Whatever the reasoning is, it is something that Australian can ill-afford, unless it can find other countries to fill the void.

Data being released today includes:

NZ – Credit Card Spending

China – CB Leading Index

UK – CBI Realised Sales

Canada – Retail & Core Retail Sales

US – Fed Monetary Policy Report, FOMC Members John Williams, Richard Clarida, James Bullard and Randal Quarles all speak

Europe – European Final & Final Core CPIs, German Final GDP, German Ifo Business Climate, Belgian NBB Business Climate, ECB President Mario Draghi speaks

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