By XE Market Analysis
The Dollar has traded mostly firmer, with EUR-USD settling near 1.1700, below yesterday's four-week high at 1.1733, and USD-JPY pushing toward 111.50, below the four-week high at 111.83 that was printed yesterday, while AUD-USD and NZD-USD were underperformers following a disappointing set of antipodean data. Risk appetite deteriorated, with European stock markets declining, S&P 500 futures turning lower from yesterday's record high, while losses in Chinese markets (the Shanghai Composite closed 1.1% for the worse) dragged the MSCI Asia-Pacific index into the red. Investors are concerned that the U.S. will next month act on its threat to implement tariffs on a further $200 bln worth of Chinese imports. Cable lifted back above 1.3000 after lifting out of a correction low of 1.2988, suggesting the Pound is retaining an underlying bid following signals of commitment to working out deal from both UK and EU Brexit negotiators. In data, German state inflation data came in slightly lower, leaving the chance of a downward shift in the preliminary HICP rate back to the ECB's limit of 2.0% with the August reading. Eurozone Aug ESI confidence fell back to 111.6 from 112.1 in the previous month, though the report overall was consistent with ongoing economic expansion. AUD-USD dropped to a six-day low of 0.7274 on Australian data misses, with Q2 capex unexpectedly shrinking 2.5% versus the median forecast for 0.6% growth, and July building approvals fell 5.2% m/m, worse than the median for -2.0%. NZD-USD also dove to a six-day low, at 0.6646, after New Zealand's August ANZ business survey fell to 10-year low of -50.3.
