Markets eased overnight, following the surge in confidence

Collinson FX: May 14: Markets eased overnight, following the surge in confidence

by Collinson FX 13 May 15:03 PDT
14 May 2025

Collinson FX: May 14: UK/US Trade Deal confirmed

Markets eased overnight, following the surge in confidence, triggered by the 90-Day Trade Agreement between China and the USA.

The temporary agreement alleviates many market fears over the disruption to global trade. The focus then turned to US CPI inflation data, released overnight, which was benign. This was a further boost to market sentiment. The USD softened, allowing the EUR to regain 1.1150, while GBP recovered to trade 1.3250.

Commodity currencies are enjoying the return of confidence to global trade, as trade exposed economies and currencies, are beneficiaries of this.

The AUD rallied to 0.6450, while the KIWI regained 0.5900. Attention remains focused on global trade wars, while GDP growth in Europe and inflation remain key measures.

Collinson FX: May 13: UK/US Trade Deal confirmed

Markets surged on the open, following the announcement of a US/China trade agreement. US equity markets rallied strongly, as did US Bond Yields on the great news, adding to the Friday agreement between the US and the UK. This is what markets were waiting for and market sentiment hit overdrive.

The US Dollar also built on recent gains, with the EUR falling below 1.1100, while the GBP dropped to 1.3200. The EUR will remain under pressure, as they are without a trade agreement with the US, and liable for future punitive tariffs.

Markets will be pre-occupied with the trade wars and resolutions, while inflation will be measured with the latest CPI number, set to be released in the US tomorrow.

Commodity currencies suffered the resurgent reserve, with the AUD slipping below 0.6400, while the NZD finally surrendered 0.5900. The impact of the rising US Dollar, was not as pronounced on the commodity currencies, as this signals an improvement in commodity trading conditions.

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