In the G10 currencies today, against the dollar NZD is the stand-out gainer (up 0.27%) with AUD the worst performer so far (-0.13%). USD has already started to improve but we would need a good US CPI print on today to keep USD from falling. North Korea announced on Thursday that it was finalising a plan to fire four missiles near the US territory of Guam. US Defence Secretary James Matthis has said that America still hopes to solve the North Korea crisis using diplomacy and war would be “catastrophic” and that diplomacy was gaining results. These geopolitical concerns lead to a sell-off on Wall Street yesterday with the S&P 500 & Nasdaq closing down 1.5% to 2,438.21 & 2.1% to 6216.87 respectively. Asian markets are all trading heavily lower also.
Yesterday also saw an unexpected uptick in weekly US initial jobless claims from 241,000 to 244,000 while producer prices in the US also dropped in the month of July by 0.1%.
Focus today will be on the US CPI data release at 12.30 GMT with no other major data releases for today, market participants will be watching comments relating to the US & North Korea closely. Looking ahead, we have a relatively quiet start for the week with UK Inflation rate & US Retail Sales released on Tuesday.