FX Update: Forex markets have been lacking directional ambition
FX Update: Forex markets have been lacking directional ambition for the most part. EUR-USD managed to briefly break lower, leaving a two-week low at 1.1322, before settling back to near net unchanged levels in the mid 1.1300s. USD-JPY remained in the mid-to-upper 109.00s, and Cable became entrenched in a narrow range in the mid 1.2900s, consolidating after the pound yesterday surged over 1% to a 1.2996 high. AUD-USD was the liveliest of the major Dollar pairings, diving during the Sydney session to a five-week low at 0.7060 after the RBA shaved growth forecasts in its quarterly Statement on Monetary Policy. This follows yesterday's trimming of GDP forecasts by both the European Commission and BoE, for the Eurozone and UK economies, respectively, which have collectively added fuel to the global slowdown narrative. Investors look to be a stasis ahead of next week's round of U.S.-China trade talks in Beijing, which will focus on the issue of intellectual property, where the two sides seem to remain a long way apart on. This comes just weeks before the U.S. has pledged to significantly raise tariffs on Chinese imports. The U.S. Ambassador to the EU, meanwhile, said with regard to the trade truce with Europe that, "the good faith and understanding that existed on July 25 has not been followed through on." In sovereign bond markets, German and Japanese debt yields fell to their lowest in over two years, with the 20-year JGB yield falling to a 27-month low. Asian and European stock markets declined, S&P 500 futures fell 0.6%, while oil prices dipped for a fifth straight day.