According to commentary from the firm's senior currency strategist, Sean Callow
Says that FX markets aren't willing at this point to elevate the issue of trade tensions above that of relative monetary policy stance.
Callow argues that the starting point for global trade is very strong, so trade volumes could take a hit from an exchange of tariffs but still remain robust. He also says that "US protectionism is not yet a major threat to global trade".
On the day, he says that a drop in US yields overnight will add further support the aussie and kiwi.
ICYMI, Trump imposed tariffs on steel and aluminium imports in the US earlier here. Meanwhile, the US dollar remains on the backfoot in trading today in a follow through of yesterday's US session as well.
You'd also have to wonder how much will Trump actually want the dollar to be weak in order to help with the issue of twin deficits this year. That's something that will come up quite a bit, especially when we move towards the mid-term elections at the end of the year.
