Kay Van-Petersen
Saxo's global macro strategist Kay Van-Petersen considers the repercussions of US president Donald Trump’s escalating trade war with China.
Article / 02 March 2018 at 14:59 GMT

FX Board: Risk-off hitting smaller currencies vs G3

Head of FX Strategy / Saxo Bank
 The story isn't the US dollar in the wake of the Trump tariff threat. Pic: Shutterstock

By John J Hardy

Please see today's FX Board PDF attached to this post for the latest Notes of Interest, Trend and Trend Heat readings, as well as a few thoughts on key chart developments below.

EURUSD isn't much of a story on the Trump protectionist threat, but the dip below 1.2200 support and subsequent recovery may inspire some bullish interest here as long as the 1.2200 area holds for a retest back toward 1.2500.
 Source: Saxo Bank

This pair has been under significant pressure this week as fresh Brexit concerns have walloped sterling and the return of risk aversion has seen JPY outperformance. The 147.50-00 zone was sliced through quickly and the next area is arguably not until the top of the weekly Ichimoku cloud around 142.70 or even the bigger 140.00 area lower still.
  Source: Saxo Bank

AUDUSD has dithered after the initial test of the important 0.7775-50 zone as the market weighs the USD negative implications of Trump's protectionist threat versus the threat to global trade and steel-making for Australia, a leading iron ore producer. The bears have the upper hand as long as the action remains below the pivot zone, possibly exploring the full extent of the range back toward 0.7500.
 Source: Saxo Bank

 – Edited by Clare MacCarthy


John J Hardy is head of FX strategy at Saxo Bank

Download document

FX Board for Friday, March 2, 2018

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