Partner Center Find a Broker

There wasn’t much on the docket for today’s morning London session. Even so, the session was rather lively since a few themes were playing out.

And the most obvious theme is the intense and broad-based selling pressure that sent the pound to the bottom of the forex heap.

Other themes of note include the strong demand for the yen, as well as the Greenback’s recovery.

It’s also worth mentioning that both the Aussie and Kiwi got swamped by sellers late into the session when China announced that it will retaliate against U.S. tariffs. The pound was still weaker overall, though.

  • French BOF business sentiment: steady at 101.0 as expected
  • RBNZ statement and presser later

Major Events/Reports:

China retaliates

Earlier, the U.S. Trade Representative confirmed that the U.S. will impose 25% tariffs on an additional $16 billion worth of Chinese goods, effective August 23.

Well, China responded with tit-for-tat tariffs, which will also take effect on August 23.

Wow. This trade war thing is beginning to heat up. Whoop-dee-doo!

Commodities take hits

Most commodities had a rough time during the morning London session and were forced to return some of their gains from yesterday’s rally.

And since yesterday’s commodity rise was likely due to the Greenback’s weakness, we can probably blame today’s broad-based slide on the Greenback’s recovery.

And for reference, the U.S. dollar index was up by 0.20% to 95.18 for the day when the session came to an end. It was in the red during the earlier session.

Other than that, market analysts also say that some base metals were taking hits because of renewed trade-related jitters after the U.S. announced that it will impose 25% tariffs on an additional $16 billion worth of Chinese goods, starting on August 23.

Base metals were actually mixed but many were in the red. And those that are still in positive territory are already off their highs.

  • Copper was down by 1.04% to $2.760 per pound
  • Tin was down by 0.34% to $19,685.00 per dry metric ton

Precious metals also got slapped lower.

  • Gold was down by 0.03% to $1,217.90 per troy ounce
  • Silver was down by 0.18% to $15.345 per troy ounce

Oil benchmarks were down in the dumps.

  • U.S. WTI crude oil was down by 1.06% to $68.44 per barrel
  • Brent crude oil was down by 0.64% to $74.17 per barrel

Risk-taking prevails in Europe (for now)

The major European equity indices started the day by taking hits and then sinking to fresh intraday lows, which market analysts blamed on disappointing earnings results.

However, buyers later returned to provide support and were even eventually able to push most of the major European equity indices into positive territory by the end of the session.

And according to market analysts, the later bout of risk-taking was inspired by hopeful optimism that China will introduce fresh stimulus in order to limit the negative effects of the ongoing trade war with the U.S., as well as sentiment spillover because of positive U.S. earnings.

However, selling pressure did appear to return later after China announced that it will retaliate against the fresh round of tariffs imposed by the U.S. Most of the major European equity indices were able to cling to their gains, though, but that may change later.

  • The pan-European FTSEurofirst 300 was up by 0.06% to 1,530.73 but reached an intraday low of 1,524.76 earlier
  • Germany’s DAX was up by 0.33% to 12,689.68 but reached an intraday low of 12,587.00 earlier
  • The blue-chip Euro Stoxx 50 was up by 0.04% to 3,508.65 but reached an intraday low of 3,495.05 earlier

Major Market Mover(s):


The Greenback stumbled during the earlier Asian session, but it managed to regain its footing during the London session and was even able to (barely) outpace the yen to claim the top spot.

As to what stoked demand for the Greenback, it’s not really clear. However, renewed trade war fears may have directed some safe-haven flows back towards the Greenback.

USD/JPY was up by 2 pips (+0.01%) to 111.13, USD/CHF was up by 23 pips (+0.23%) to 0.9967, USD/CAD was up by 32 pips (+0.25%) to 1.3089


The pound got a good bashing and was the worst-performing currency of the morning London session and is also currently the worst-performing currency of the day so far.

There were no apparent catalysts, interestingly enough. However, some market analysts pointed to the “bigger picture” themes, namely growing fears of a “no deal” Brexit and concerns that the BOE may not be hiking again anytime soon.

GBP/USD was down by 79 pips (-0.61%) to 1.2857, GBP/JPY was down by 85 pips (-0.59%) to 142.87, GBP/CHF was down by 49 pips (-0.38%) to 1.2815


The yen had a strong showing during the session and was outclassed only by the resurging Greenback.

The yen’s strength may have initially been fueled by safe-haven demand due to the risk-off start in Europe. However, the yen continued to take ground from everything else (except USD) when risk sentiment improved.

And according to some market analysts, that’s because of an earlier report that claimed that the BOJ is becoming more hawkish.

EUR/JPY was down by 33 pips (-0.26%) to 128.72, NZD/JPY was down by 16 pips (-0.22%) to 74.83, CHF/JPY was down by 25 pips (-0.22%) to 111.48

Watch Out For:

  • 12:30 pm GMT: Canadian building permits (-1.2% expected vs. 4.7% previous)
  • 12:45 pm GMT: Richmond Fed President Thomas Barkin will speak
  • 2:30 pm GMT: U.S. crude oil inventories (-2.8M expected vs. 3.8M previous)
  • 9:00 pm GMT: RBNZ monetary policy statement (OCR steady at 1.75% expected); read Forex Gump’s trading guide
  • 10:00 pm GMT: RBNZ presser