Currency markets made a sluggish, risk-off start to the new week as questions swirled around the US tariff negotiating deadline. After previously suggesting Wednesday (9 July) was a firm deadline, treasury secretary Scott Bessant gave the strongest indication yet that things were a little more fluid, and that some economies might be given more time (perhaps even beyond 1 August) to negotiate a deal.
The US dollar benefitted from this uneasy start, strengthening somewhat against the euro and trading sideways against the pound. For its part, sterling was able to claw back some of the ground it lost to the euro in last week’s wobbly conditions.
All eyes remain on Washington, D.C., where the self-imposed deadline for getting dozens of trade deals done is beginning to look somewhat optimistic. In what many took to be a negotiating tactic, President Trump yesterday threatened BRICS-aligned nations (that’s Brazil, Russia, India, China, South Africa, and a handful of others) with an additional 10% tariff for promoting “anti-American” policies.
The German trade surplus widened to €18.4 billion in May, beating expectations by several billion euros. Exports fell to a four-month low, with a notable slowdown in exports to the United States and China.
Australia’s central bank, the Reserve Bank of Australia (RBA), this morning voted to keep interest rates unchanged at 3.85%. The Australian dollar is up by around 0.4% against the pound since that decision, as markets had been expecting a quarter-point cut.
Tech giant Apple has appealed a whopping €500 million fine dished out by the European Union for issues around its app store. In reply, Apple’s lawyers decried the “unprecedented” scale of the fine and the “unlawful” changes it demanded of the app store.
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