US-China trade concerns dominated during Wednesday ahead of crucial bilateral talks with tough US rhetoric unsettling market sentiment.

US-China trade concerns dominated during Wednesday ahead of crucial bilateral talks with tough US rhetoric unsettling market sentiment.

Equity markets remained under pressure given global growth fears and the Chinese yuan retreated.

The yen maintained a strong tone with further demand on defensive grounds. Commodity currencies and Sterling also tended to drift lower.

EUR/USD was trapped in narrow ranges with reservations over further Euro selling.

Oil prices were boosted by an unexpected draw in US crude inventories, but gains were hit by global growth concerns.

Gold held support, but precious metals were unable to gain strong support.

Sterling lost ground ahead of the New York open with sentiment damaged by reports that Brexit talks between the government and opposition Labour Party were close to collapse. Fragile global risk conditions also tended to be a negative factor for the UK currency amid concerns over the international growth environment.

Prime Minister May declined to set any definitive date for her resignation and expressed hope that the Withdrawal Deal would be voted on by May 23rd. Market confidence in any near-term breakthrough was, however, low which undermined confidence amid little incentive for buying.

Overall, GBP/USD dipped below 1.3000 before finding an element of support while GBP/EUR pushed to weekly lows around 1.1600 before correcting slightly and settling around 1.1625.

The RICS house-price indicator remained at -23 for April with little evidence of a significant recovery in market sentiment as caution prevailed and Sterling was unable to gain significant traction as GBP/USD traded just above 1.3000.

Economic Calendar

Expected Previous
13:30 USD PPI Ex Food & Energy (Y/Y)(APR) 2.50% 2.40%
13:30 USD PPI Ex Food & Energy (M/M)(APR) 0.20% 0.30%
13:30 USD PPI (M/M)(APR) 0.20% 0.60%
13:30 USD PPI (Y/Y)(APR) 2.30% 2.20%
13:30 USD Trade Balance(MAR) -51.10B -49.40B
13:30 CAD New Housing Price Index (M/M)(MAR) - -0.1
13:30 CAD Trade Balance(MAR) - -2.90B
13:30 USD FOMC Member Powell Speech - -
13:30 USD Continuing Jobless Claims 1.670K 1.671K
13:30 USD Initial Jobless Claims 215K 230K
14:45 FOMC Member Raphael Bostic speech - -
15:00 USD Wholesale Inventories(MAR 08) - 0.20%
18:15 Fed President Evans Speaks - -
23:45 NZD Electronic Card Retail Sales (Y/Y)(APR 08) - 0.70%
23:45 NZD Electronic Card Retail Sales (M/M)(APR 08) - -0.30%

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.