Currencies are in a risk-off mood
Negative risk tones are reverberating through markets after Trump tweeted over the weekend that the US will increase tariffs on China, potentially jeapordising the trade deal between the two countries. As it stands, China's participation in trade talks this week is still unconfirmed but the latest report suggests that vice premier, Liu He, is to make a delayed and shortened trip still; offering some hope at least.
Regardless, the yen holds firm on the day as we had gaps everywhere at the open across all asset classes. However, USD/JPY has recovered from its lows earlier following the latest report above. That said, the yen is still comfortably higher as markets are still jittery and in fear that the breakdown in trade talks will threaten any global economic rebound potential.
The dollar and franc are the other two main beneficiaries with the market mood being sour, meanwhile commodity/risk currencies are being hammered with the aussie, kiwi and loonie bearing the brunt of it.
The pound isn't doing much better after a solid performance last week as it is also being routed alongside the commodity/risk currencies above. It's all about risk sentiment as we head towards the start of European trading and given the lack of key economic releases today, expect that to remain the dominant theme ahead of North American trading as well.
