Collinson FX: May 12: US and China meet for key trade agreement and progress is expected.
by Collinson FX 12 May 06:39 AEST
12 May 2025
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Collinson FX: May 12: UK/US Trade Deal confirmed
Markets closed off a sold week flat, following the announcement of the first major trade deal, made with the US since ‘Liberation Day’. The UK and the US signed a Trade Agreement, setting a precedent, others are expected to follow in quick time. The US Treasury Secretary meets, this coming weekend in Switzerland, with China. This is the key trade agreement and progress is expected. The US Dollar continued to book gains, with the EUR drifting back towards 1.1200, while the GBP attempts to hold 1.3300. This coming week on markets welcomes a deluge of economic data, from across the globe, including GDP growth data and inflation numbers from both sides of the Atlantic.
The rising reserve has flattened out the commodity currencies recent gains, with the AUD falling back to 0.6400, while the NZD looks to hold 0.5900. Markets will be focused on US Trade agreements as wells as growth and inflation data over the coming trading week.
Collinson FX: May 9: UK/US Trade Deal confirmed
The much-rumoured trade deal between the UK and the USA, was confirmed by President Trump, boosting market confidence in the Trump approach to tariffs and trade. The deal is the first major trade deal, between the USA and a large economy, since the tariff war began. This is what markets had been counting on and it led to gains in equities and the US Dollar. The EUR fell back to 1.1300, while the GBP traded 1.3340, rising on the back of a renewal of rate cuts from the Bank of England. European economic data is on the improve, with German Factory Orders and Industrial Production, showing positive gains.
The stronger reserve sent the AUD back to 0.6400, while the NZD struggled to hold 0.5900. The good news surrounding the trade agreement between the US and the UK, is very positive for trade dependent, commodity countries. These trade deals need to be forthcoming and include larger Asian Countries. This will only add to existing pressures on China, who need to seek a deal, with the USA.
Collinson FX: May 8: Markets in Recovery mode
Markets were in recovery mode, ahead of the FOMC interest rate decision, following losses to equity market to open the week. All eyes are on the Federal Reserve, which is forecast to leave rates unchanged, despite pressure from President Trump. European economic data continues to improve, but from very low lows. China is meeting with the USA for preliminary trade talks, as other Asian Countries work to cement trade agreements. The US Dollar was stable, with the EUR trading around 1.1350, while the GBP drifted to 1.3350.Commodity currencies tread water ahead of the FOMC decision, with the AUD trading close to 0.6450, while the NZD cannot best 0.6000. All eyes remain on the Fed and awaiting any announcement of US trade agreements. China announcement more stimulative monetary and fiscal polices, to stimulate the economy and insure against the dire impact of US tariffs.
Collinson FX: May 7: Trade deals awaited
US equity markets drifted lower, as did the US Dollar, as analysts await the impending announcements of trade deals with the US. Promises of looming trade deals have led to high expectations and a failure to deliver, could cause instability on global markets. US economic data has been steady and now the other ‘ball in the air’ is the latest Fed interest rate decision. Trump has called for rate cuts, but Fed Chairman Powell has been steadfast on his independence, leading to low expectations from markets. The US Dollar slipped back, with the EUR trading 1.1350, while the GBP rallied to 1.3370.The market open in Australia was static, greeting the news of a re-elected Labor Government, neutrally. The latest Australian inflation gauge reading was higher than expected, which may deter the RBA from cutting rates, but will probably not. The AUD pushed back up towards 0.6500, while the NZD is looking to regain 0.6000. All eyes are on the global trade wars and the FOMC.
Collinson FX: May 6: Confidence slowly returns
Markets opened the trading week flat, but confidence is slowly returning, allowing a recovery in equities and the US Dollar. The EUR slipped back to 1.1300, while the GBP dropped back to 1.3250. The recovery in equities and the US Dollar would receive a massive boost if the US announce trade deals with major trading partners. This may be coming soon and markets are counting on this, as a China resolution remains elusive. US ISM PMI data was better than expected and was a boost to markets, while speculation builds over the interest rate decisions from the FOMC and the Bank of England.The recovery in the reserve currency interrupted gains in commodity currencies, with the AUD drifting back to 0.6450, while the NZD looks to hold 0.5950. Global trade agreements remain front and centre, while attention will begin to focus on the US Central Bank. Trump has mounted pressure on the Fed and he will be looking for a return.
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