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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/aug/21/dollar-falls-after-trump-lashes-out-at-federal-reserve-business-live
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| Dollar falls after Trump lashes out at Federal Reserve - business live | Dollar falls after Trump lashes out at Federal Reserve - business live |
| (35 minutes later) | |
| The latest UK grocery market share figures are out: | |
| Kantar Grocery Market Share Update 21/08/2018 pic.twitter.com/71uZLqGjxW | |
| Apparently the heatwave and Love Island gave a boost to sales. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: | |
| The grocery market experienced strong growth buoyed in particular by the recent heatwave. Over July, thirsty Brits spent an additional £67 million on alcoholic drinks, while non-alcoholic beers were cheered on by the sun with sales up 58% compared to this time last year. Soft drinks also increased – up 28%. Meanwhile, Love Island not only tugged on shoppers’ heartstrings but also their purse strings as men’s skincare products jumped by 16%. | |
| As expected, there is a caution tone to early trading in Europe. | |
| The FTSE 100 opened down 0.2%, Germany’s Dax has dipped 0.1%, France’s Cac is 0.2% lower and Spain’s Ibex is off 0.1%. | |
| With the FTSE 100 expected to open lower, Artjom Hatsaturjants at Accendo Markets, said: | |
| Calls for a negative open come in spite of upbeat trading on Wall St and in Asia, where markets were hopeful for an easing in Sino-US trade tensions, and after China’s banking regulator called for local banks to increase infrastructure lending amid a slight pullback of Chinese economy. | |
| Most of the FTSE negativity is generated by dollar losses after President Trump criticised the Fed Chair Powell’s interest-rate hiking policy in an interview with Reuters. The Fed is independent in setting monetary policy and markets were spooked by yet another comment from Donald Trump criticising higher interest rates (his property magnate background seeping through?). | |
| Sterling strength this morning is pressuring the FTSE, though there is silver lining to this cloud, as the corresponding greenback weakness is proving beneficial to US dollar-denominated commodities, as oil, copper and gold prices are higher this morning. That said, dual-listed Miners are lower in Australia overnight on the back of BHP Billiton results missing expectations. | |
| European markets are expected to edge lower when trading begins shortly: | European markets are expected to edge lower when trading begins shortly: |
| European Opening Calls:#FTSE 7574 -0.22%#DAX 12326 -0.05%#CAC 5377 -0.04%#MIB 20461 -0.05%#IBEX 9462 -0.07% | European Opening Calls:#FTSE 7574 -0.22%#DAX 12326 -0.05%#CAC 5377 -0.04%#MIB 20461 -0.05%#IBEX 9462 -0.07% |
| Turkey is still giving investors pause for thought, and Italy is also an increasing cause for concern. David Madden, market analyst at CMC Markets UK, said; | Turkey is still giving investors pause for thought, and Italy is also an increasing cause for concern. David Madden, market analyst at CMC Markets UK, said; |
| European equities ... are still underperforming their US counterparts. The currency crisis is still hanging over Turkey, as the revelation that S&P and Moody’s downgraded the nation’s debt rating got traders wondering if individual Turkish banks could be in line to be downgraded next. Should that be the case, that could be the catalyst for a move lower in the euro and or eurozone banks. President Trump will keep his tough stance against Turkey, and won’t make any concessions for the release of US pastor Andrew Brunson, and this is likely to keep pressure on Turkey too. | European equities ... are still underperforming their US counterparts. The currency crisis is still hanging over Turkey, as the revelation that S&P and Moody’s downgraded the nation’s debt rating got traders wondering if individual Turkish banks could be in line to be downgraded next. Should that be the case, that could be the catalyst for a move lower in the euro and or eurozone banks. President Trump will keep his tough stance against Turkey, and won’t make any concessions for the release of US pastor Andrew Brunson, and this is likely to keep pressure on Turkey too. |
| Moody’s will carry out their review of Italy’s debt rating by October. In the grand scheme of things, Italy has the potential to be a much bigger problem for the eurozone than Turkey. The European Central Bank can only buy investment grade bonds for their stimulus package, and should Italian debt be classified as ‘junk’, it could spark a sell-off in Italian government debt, and in turn drive up their borrowing costs. | Moody’s will carry out their review of Italy’s debt rating by October. In the grand scheme of things, Italy has the potential to be a much bigger problem for the eurozone than Turkey. The European Central Bank can only buy investment grade bonds for their stimulus package, and should Italian debt be classified as ‘junk’, it could spark a sell-off in Italian government debt, and in turn drive up their borrowing costs. |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Kicking out a well respected central banker and replacing them with your own appointee should guarantee an easy ride for the newcomer, you would have thought. But these days we live in Trump world and Jerome Powell, the president’s choice to chair the Federal Reserve as a replacement for Janet Yellen, got it in the neck from the White House on Monday. | Kicking out a well respected central banker and replacing them with your own appointee should guarantee an easy ride for the newcomer, you would have thought. But these days we live in Trump world and Jerome Powell, the president’s choice to chair the Federal Reserve as a replacement for Janet Yellen, got it in the neck from the White House on Monday. |
| The Fed has been raising interest rates and is expected to continue doing so, with another two increases expected this year. But President Trump told Reuters on Monday: | The Fed has been raising interest rates and is expected to continue doing so, with another two increases expected this year. But President Trump told Reuters on Monday: |
| I’m not thrilled with his raising of interest rates, no, I’m not thrilled. | I’m not thrilled with his raising of interest rates, no, I’m not thrilled. |
| We’re negotiating very powerfully and strongly with other nations [on trade]. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated. | We’re negotiating very powerfully and strongly with other nations [on trade]. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated. |
| Not what Powell wants to hear ahead of this week’s key meeting of central bankers in Jackson Hole. And Trump’s intervention puts the Fed in a tricky spot. Jasper Lawler, head of research at London Capital Group, said: | Not what Powell wants to hear ahead of this week’s key meeting of central bankers in Jackson Hole. And Trump’s intervention puts the Fed in a tricky spot. Jasper Lawler, head of research at London Capital Group, said: |
| Trump could be sowing the seed for market perception problems later down the line. For example, should the stronger dollar result in weaker economic data moving towards December and the Fed decides not to hike. The market could question whether the Fed opted not to hike on the basis of data or to appease Trump? So, whilst Trump will not influence the path of rate hikes, his comments could impact on market’s perception of what is happening, which is an equally dangerous game to be playing. | Trump could be sowing the seed for market perception problems later down the line. For example, should the stronger dollar result in weaker economic data moving towards December and the Fed decides not to hike. The market could question whether the Fed opted not to hike on the basis of data or to appease Trump? So, whilst Trump will not influence the path of rate hikes, his comments could impact on market’s perception of what is happening, which is an equally dangerous game to be playing. |
| Trump also used the Reuters interview to take another swipe at China - and for good measure Europe - for supposedly manipulating their currencies. | Trump also used the Reuters interview to take another swipe at China - and for good measure Europe - for supposedly manipulating their currencies. |
| And ahead of this week’s meeting between US and Chinese officials to discuss the current trade dispute, Trump said he did not expect much progress from the talks, which is not what the markets want to hear. | And ahead of this week’s meeting between US and Chinese officials to discuss the current trade dispute, Trump said he did not expect much progress from the talks, which is not what the markets want to hear. |
| Still, if the president wants a weaker US currency, he got his wish. The dollar is slipping back, with the pound currently up 0.37% to $1.2841 and the euro around 0.5% better. | Still, if the president wants a weaker US currency, he got his wish. The dollar is slipping back, with the pound currently up 0.37% to $1.2841 and the euro around 0.5% better. |
| On a relatively quiet day, there could be some good news for UK chancellor Philip Hammond ahead of his autumn budget. | On a relatively quiet day, there could be some good news for UK chancellor Philip Hammond ahead of his autumn budget. |
| The UK is expected to record its biggest July budget surplus for 17 years, moving from a deficit of £5.4bn last month to a surplus of £1.1bn, helped by increased corporation tax payments. | The UK is expected to record its biggest July budget surplus for 17 years, moving from a deficit of £5.4bn last month to a surplus of £1.1bn, helped by increased corporation tax payments. |
| Agenda: | Agenda: |
| 9.30 BST UK public finance figures | 9.30 BST UK public finance figures |
| 11.00 BST CBI industrial trends | 11.00 BST CBI industrial trends |